E-Commodities Holdings Limited - Environmental & Social Information 2021

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Stock Code: 1733

2020 ENVIRONMENTAL, Photo by SOCIAL AND Mr. Li Jianlou GOVERNANCE REPORT

CONTENTS I. ABOUT THIS REPORT	CONTENTS I. ABOUT THIS REPORT	2
II.	ABOUT E-COMMODITIES	3
	Corporate Profile
	Operating Results
	Assets Footprint
III.	SUSTAINABLE DEVELOPMENT	7
	Sustainable Development Governance Structure
	Communication with Stakeholders
	Materiality Assessment
IV.	ENSURE SAFE PRODUCTION	13
	Safe Production
	Safety Training
	Safety Performance
V.	PRACTICE ENVIRONMENTAL
	PROTECTION OPERATIONS	22
	Pollution Control and Emission Reduction
	Make Good Use of Resources

	Green Office
	Climate Change
	Environmental Performance
VI.	CARE AND CULTIVATE TALENTS	35
	Talent Recruitment
	Talent Care
	Talent Training
VII.	IMPROVE QUALITY CONTROL	45
	Integrity Management
	Quality Assurance
	Responsible Procurement
VIII.	ACTIVELY GIVE BACK TO THE SOCIETY	53
IX.	APPENDIX: CONTENT INDEX OF
	ESG REPORTING GUIDE	54

Photo by Mr. Li Jianlou

I. ABOUT THIS REPORT

This report is the fifth Environmental, Social and Governance Report published by E-Commodities Holdings Limited (the “ Company ” or “ E-Commodities ”). The purpose is to report on the philosophy and practice of the environmental, social and governance (hereinafter referred to as “ ESG ”) responsibilities of the Company and its subsidiaries (collectively referred to as the “ Group ”, “ we ” or “ us ”) in 2020, and to respond to material issues of concern to major stakeholders.

REPORTING SCOPE

Business Scope: This report covers the scope of businesses that are directly controlled by the Group, including supply chain trading and integrated supply chain services (warehousing, transportation, washing).

Time scope: This report covers the period from 1 January 2020 to 31 December 2020 (the “ Reporting Period ” or the “ Year 2020 ”). In order to enhance the integrity of the report, parts of the contents may precede or post-date the Reporting Period, as appropriate.

BASIS OF PREPARATION

The Group has prepared this report in accordance with the reporting principles of materiality, quantitative, balance and consistency as set out in the Environmental, Social and Governance Reporting Guide in Appendix 27 (the “ ESG Guide ”) to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited issued by The Stock Exchange of Hong Kong Limited (the “ Hong Kong Stock Exchange ”) in 2016. This report complies with the “comply or explain” provisions set out in the ESG Guide, and explains the impact of the Group’s business and operational activities on the environment and society accordingly.

APPROVAL AND CONFIRMATION

This report has been reviewed by the board of directors of the Company (the “ Board ”), which is responsible for the authenticity and validity of the information contained, and for ensuring that there is no false record and misleading description in the content.

REPORT DISTRIBUTION CHANNEL

This Report is published in two versions, Traditional Chinese and English. In case of any discrepancy between the two versions, the Traditional Chinese version shall prevail. This report is available for review and download on the websites of the Hong Kong Exchanges and Clearing Limited (www.hkexnews.hk) and the Company (http://www.e-comm.com/tc/IRESGReports. aspx).

FEEDBACK

Thank you for reading this report. Your comments and suggestions will help us make continuous improvements on the contents of the report and drive the Group to make corresponding contributions to the progress and harmonious development of society in the process of growing together with stakeholders. Please feel free to provide your comments or suggestions via the following contact details:

Beijing Office: Room 706, Tower B, Tianrun Fortune Center, No. 58, Dongzongbu Hutong, Dongcheng District, Beijing, (86) 10-8517 1200

Hong Kong Office: Unit 1902, Floor 19, Far East Finance Centre, 16 Harcourt Road, Hong Kong (852) 2537 0111 Email: [email protected]

2 E-COMMODITIES HOLDINGS LIMITED Environmental, Social and Governance Report 2020

II. ABOUT E-COMMODITIES

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Photo by
Mr. Li Jianlou
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CORPORATE PROFILE

The Company was incorporated in the British Virgin Islands on 17 September 2007. It has established subsidiaries and offices in Hong Kong, Beijing, Shanghai, Singapore, and Brisbane, Australia. The shares of the Company were successfully listed on the main board of the Hong Kong Stock Exchange on 11 October 2010.

E-Commodities is principally engaged in the processing and trading of coal and other products and providing integrated supply chain services. Apart from the commodities supply chain trading business segment, in 2020, the Company’s integrated supply chain services sector also made significant breakthroughs, by further expanding from domestic commodities integrated supply chain services in 2019 to road transport and storage in Mongolia and cross-border ports, as well as domestic multimodal transport, storage, washing and processing and other integrated supply chain services. With its business expansion and diversified development since its establishment, E-Commodities has not only become one of the major coking coal importers into China, but also engaged in businesses such as iron ore, petrochemical products and non-ferrous metals. It has successfully established a comprehensive closed loop system of integrated industrial chain with a combination of purchasing, processing, logistics, sales and finance. By virtue of a wide network of suppliers and end-users, optimized logistics facilities, and extensive management experience in bulk commodities, E-Commodities provides a platform of well-rounded services for each segment of the relevant bulk commodities value chain. The target users of such platform maily comprise, among others, mine owners, highway and railway transportation operators, warehousing service providers, clearance declaration and custom clearance agents, shipping agents, financing providers and end-users.

Environmental, Social and Governance Report 2020 E-COMMODITIES HOLDINGS LIMITED

II. ABOUT E-COMMODITIES

Supply chain trading

‧ We provide our end customers with supply chain trading services via our supply chain trading segment, covering diversified commodities including, among others, coal products, oil and petrochemical products, iron ore, nonferrous metals and coke

Integrated supply chain services

‧ E-Commodities is one of few companies in the PRC with strategic land reserves and advanced logistics facilities at Sino-Mongolian and Sino-Russian cross-border ports, and continues to provide customers with efficient and accurate warehousing, loading and unloading, delivery , processing and washing services. Meanwhile, the Group continues to integrate advanced technological methods into its own superior logistics management system to help intelligent upgrades on every logistic aspect, and connect upstream and downstream ecology by recreating online supply chain business processes to achieve whole-chain collaboration, comprehensively improve the efficiency and reliability of supply chain and establish competitive and environmental protection of integrated supply chain service platform

The Group has received various awards during the Reporting Period, and the quality of its products and services has been widely recognized by the industry. The awards include the Top 10 Coal Coke Suppliers in 2020 Annual Gala (2020年度盛典十佳煤焦供應商), the Top 10 Service Platform Enterprises in the Logistics Industry (物流行業十佳服務平台企業) and the Advanced Enterprises in the Digital Transformation of the Logistics Industry (物流行業數字化轉型先進企業), etc.

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4 E-COMMODITIES HOLDINGS LIMITED Environmental, Social and Governance Report 2020

ABOUT E-COMMODITIES

OPERATING RESULTS

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Revenue (in HK$ million) Supply Chain Trading Volumes (in million tonnes)
35,000 32,817 30 24.16 23.86 19.74
30,052
30,000 25
25,000 21,977
20
20,000
15
15,000 21.34 21.85
10 18.89
10,000
5,000 5
0 0 2.82 2.01 0.85
2018 2019 2020 2018 2019 2020
Coal Other
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Net Profit (in HK$ million) Total Assets (in HK$ million)
1,000 893 9,500 9,323
800 9,000
8,692
600 8,500
453
400 313 8,000 7,790
200 7,500
0 7,000
2018 2019 2020 2018 2019 2020
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Total Equity (in HK$ million) Cash Balance (in HK$ million)
5,000 725 722
720
3,811
4,000
715
3,121 3,142
710
3,000
703
705
699
2,000 700
695
1,000
690
0 685
2018 2019 2020 2018 2019 2020
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Environmental, Social and Governance Report 2020 E-COMMODITIES HOLDINGS LIMITED

II. ABOUT E-COMMODITIES

ASSETS FOOTPRINT

The Company deploys border crossing facilities, strategic land reserves and efficient infrastructure, including, among others, logistics parks, railway parks, transhipment lines, railway equity, railway stations, self-owned wagons and coal processing plants, at and along the Sino-Mongolian border crossing to client-side. In addition, the Company carries out intelligent upgrades of various logistic aspects and develops container transportation to comprehensively improve the efficiency and reliability of the supply chain.

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Ceke Port Gants Mod Port
60 km away from the nearestMongolian coal mines 230 km away from the nearestMongolian coal mines Ulan Bator
Major suppliers: SouthGobi and Mark Major supplier: TTT and MMC
It owns logistics parks of Chineseports with a site area of 790,301 sq.m.Annual transit volume of 5 million tonnes Purchasing coal from TTT and MMC's coal mine located in Tavan Tolgoi Coal Processing PlantUrad Zhongqi Erlian Railway Joint Venture Manzhouli Port
It owns logistics parks of Chinese ports
with a site area of 642,342.09 sq.m. 7 million tonnes/year heavy medium Owned port lands of 1,971,473 sq.m. Owned port land of 1,336,123 sq.m.
Containers and Drawbar Trailers Annual transit volume of 5 million tonnesIt owns a 5.0% equity interest inXixiaozhao-Gants Mod lineIt owns a 5.495% equity interest in coal processing capacityIts park with a site area of636,530.87 sq.m.Hengde (254,244.28 sq.m.恆德) with a site area of Railway transhipment capacity of 10 million tonnes/year Railway loading capacity of 10 milliontonnes/year (under construction)Major suppliers: Mechel and Suek
Gants Mod-Wanshuiquan line
Containers 9,300 pairs used in China It owns a 15% equity interest
1,000 pairs overseas in Bayannur Hutie Ruyi Mongolia
Drawbar Trailers 120 in Mongolia
620 in Gants Mod Port Key mining sites
60 in Ceke Port
Mining site
Ceke Railway Joint Venture Railway
Railway proposed to construct
Railway transhipment capacity of
10 million tonnes/yearRailway logistics park with a site area Erlianhaote PRC New Railway
of approximately 723,625 sq.m. Tavan Tolgoi Railway under construction
Ovoot Tolgoi Self-owned Wagons Railway paved
Owns a 9% equity interest in Huayuan Railway planned to pave
Ceke Oyu Tolgoi Gants Mod Logistics
Representing 1.20 million tonnes/year
self-owned transportation capacity
Hami Urad Zhongqi Bay of
Qinhuangdao
Jining Railway Joint Venture Longkou Coal
Railway transhipment capacity of Jining Processing Plant
10 million tonnes/year Linhe Baotou 4 million tonnes/year heavy
Owned land of 309,020 sq.m. medium coal processing capacity
Owned land of 81,156 sq.m.
Exclusive Logistics Service Rights
Wuyuan of Salaqi Coal Processing Plant Beijing
Wuhai and Minghua Logistics Park Port of Tianjin Bohai Bay
JiayuguanJiuquan 4 million tonnes/year heavy medium Jining Washing Plant Container Logistics Park Coal processing plant with a coal processing capacity of 4 million tonnesWith trains with ten thousands of tonnes through-in and through-out, a daily average Processing PlantBayuquan Coal
coal processing capacity Planning land use of 276,674.05 sq.m. of 18 trains transported with ten thousands 4 million tonnes/year heavy
Owned land of 702,353 sq.m. Annual transhipment capacity of 9 million tonnes of tonnes, and with the lowest cost, its washing plant with a site area of 195,044.48 sq.m. medium coal processing capacityOwned land of 56,700 sq.m.
Station platform with a site area of 254,786.5 sq.m.
Photo by:
Mr. Li Jianlou
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E-COMMODITIES HOLDINGS LIMITED Environmental, Social and Governance Report 2020
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III. SUSTAINABLE DEVELOPMENT

The impact of material ESG issues on the Group is no less than that of other kinds of corporate risks. Therefore, accurately identifying and capturing the opportunities brought by ESG issues and managing ESG-related risks are important tasks in corporate sustainable development. The Group appreciates the importance of sustainable development management to corporate development, and it strives to establish an effective governance system for monitoring the performance of sustainable development, as well as to understand and meet all parties’ expectations regarding the Group’s sustainable development by maintaining communication with various stakeholders. The Group will continue to promote sustainable development and regularly review and manage important sustainable development issues to continuously improve its ability to perform its responsibilities.

SUSTAINABLE DEVELOPMENT GOVERNANCE STRUCTURE

The Group attaches great importance to works related to sustainable development, which is monitored by the Board and takes full responsibility for ESG strategy and reporting. We initially established a sustainable development management mechanism, with the Board as the highest decision-making level of sustainable development management, providing strategic guidance for the overall management, and ensuring the establishment of appropriate and effective ESG risk management and internal controls. The Health, Safety and Environment Committee (HSE Committee) under the Board reports to the Board and is responsible for the performance of the Board. The management manages routine ESG work. The person in charge of major functional departments coordinates and carries out the ESG-related work and reports to the senior management and the Board on a regular basis.

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The Board
• the highest governance level
HSE
Committee • superving on the Board
The management • management on routine ESG work
Major functional
• coordinating and carrying out the
departments
ESG-related work
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In order to further assist the Board on the management on ESG-related work and to improve the sustainable development governance structure of the Group, during the Reporting Period, the Company renewed and revised the terms of reference of the HSE Committee under the Board and stipulated that the responsibilities of the HSE Committee include supervision and review of health, safety, environmental and community relations conditions as well as making appropriate recommendations and reporting to the Board. For detailed terms of reference of the HSE Committee, please refer to the announcement of the Company issued on the website of Hong Kong Stock Exchange on 14 October 2020.

Environmental, Social and Governance Report 2020 E-COMMODITIES HOLDINGS LIMITED 7

III. SUSTAINABLE DEVELOPMENT

COMMUNICATION WITH STAKEHOLDERS

The Group is attentive to the demands and opinions of various stakeholders, and usually has sufficient communication with them through different channels. We identified the Group’s key stakeholders based on the two dimensions of “degree of influence by the enterprise” and “degree of influence on the enterprise”, and established extensive and efficient communication channels with key stakeholders to respond to their expectations and demands in a timely manner.

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Main stakeholders Expectations and demands Communication or response channels
● Healthy and sustainable ● Information filing
development ● Tax returns filing
● Compliance with laws and ● Government conferences
regulations ● Railway operation
Government and regulatory ● Steady growth in tax revenue ● Business innovation
authorities ● Serving local economy
● Facilitating industry development
● Safe production
● Energy conservation and reduction
of emissions
● Healthy and sustainable ● General meeting of shareholders
development ● Information disclosure
● Compliance with laws and ● Daily communication
regulations ● Telephone conferences
Shareholders and investors ● Safe production ● Results announcement
● Energy conservation and reduction ● Company website
of emissions
● Risk control
● Return on investment
● Win-win cooperation ● Open tender
● Quality of products/services ● Contract negotiation
Business partners and suppliers
● Commitment ● Daily business communication
● Supplier access management
● Quality of products/services ● After-sales services
Customers
● Quality supervision
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SUSTAINABLE DEVELOPMENT

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Main stakeholders Expectations and demands Communication or response channels
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Main stakeholders Expectations and demands Communication or response channels	Main stakeholders Expectations and demands Communication or response channels	Main stakeholders Expectations and demands Communication or response channels


	Employees	● Safe production ● Employees’ rights and interests ● Training and development ● Occupational health ● Employee care
		● Environment protection ● Community charity

MATERIALITY ASSESSMENT

In accordance with the guidelines of the Stock Exchange, materiality means that an issuer should make a disclosure when the Board determines that the ESG issues will have a material impact on investors or other stakeholders. Therefore, materiality assessment helps the Group to identify and assess ESG issues that are important to the Group, so as to determine the focus of ESG work, incorporate it into the relevant management system, and disclose the report in a targeted manner. During the Reporting Period, the Group has reviewed the survey results of the year 2019 material issues and confirmed by the Board that they are still applicable for the year 2020 to ensure that they are in line with the actual situation of the Group. Relevant material issues will continue to be the focus of the Group’s sustainable development management in the future, which will be disclosed in detail in the following chapters of this report. In the future, we will deepen and strengthen the communication with stakeholders, evaluate and review the material issues of concern to the stakeholders, and continue to improve the management of such issues.

Environmental, Social and Governance Report 2020 E-COMMODITIES HOLDINGS LIMITED 9

III. SUSTAINABLE DEVELOPMENT

The matrix below presents the Group’s 13 material issues on environmental and social aspects, which are matters, after analysis based on the two dimensions of “materiality to the Company’s business” and “materiality to the stakeholders”, that ranking top 50% of one or both of the above dimensions.

Safe production
Occupational health and safety
Employment and employees’ rights
Employee benefits and welfare
Staff training and development
Compliance with laws and regulations
Effective and environmentally friendly logistics
Emission and management of air pollutant
Emission and management of solid waste
Reasonable use of resources
Emission and management of sewage
Environment and natural resources protection
Development of clean raw materials

Material issues on social aspects

Material issues on environmental aspects

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SUSTAINABLE DEVELOPMENT

SOCIAL ASPECT

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Material issues on social aspects
10
9
8
7
6
5
4
3
2
1
0
0 1 2 3 4 5 6 7 8 9 10
Materiality to the Company’s business
Materiality of the stakeholders
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Employee benefits and welfare Employment and employees’ rights Occupational health and safety Staff training and development Compliance with laws and regulations Labour standards Safe production Contribution to the industry Integrity management Contribution to local economy Supply chain management Products and services quality management and after-sales services

Environmental, Social and Governance Report 2020 E-COMMODITIES HOLDINGS LIMITED 11

III. SUSTAINABLE DEVELOPMENT

ENVIRONMENTAL ASPECT

Material issues on environmental aspects

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10
9
8
7
6
5
4
3
2
1
0
0 1 2 3 4 5 6 7 8 9 10
Materiality of the stakeholders
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Materiality to the Company’s business

Reasonable use of resources Effective and environmentally friendly logistics Emission and management of air pollutant Environment and natural resources protection Development of clean raw materials Emission and management Emission and management of sewage Emission and management of greenhouse gases of solid waste

12 E-COMMODITIES HOLDINGS LIMITED Environmental, Social and Governance Report 2020

IV. ENSURE SAFE PRODUCTION

The health and safety of employees is the top priority of the Group. The Group strictly complies with the national and local laws and regulations as well as industry standards including, among others, Production Safety Law of the People’s Republic of China (《中華人民共和國安全生產法》), the Law of the People’s Republic of China on the Prevention and Control of Occupational Diseases (《中華人民共和國職業病防治法》), the Regulation for Prevention of Dust Lung Disease of People’s Republic of China (《中華人民共和國塵肺病防治條例》), the Management Rules for Labor Protection Supplies of Employers ( 《用人單位勞動防護用品管理規範》), the Regulations on Labor Protection in Workplaces Where Toxic Substances are Used (《使用有毒物品作業場所勞動保護條例》), the National Occupational Hygiene Standard Management Measures ( 《國家職業衛生標準管理辦法》), the Occupational Hazard Declaration Management Measures at Workplaces (《作業場所職業危害申報管理辦法》), the Provisions on the Supervision and Administration of Occupational Health at Work Sites, the Administrative Measures for the Supervision of Employers’ Occupational Health Surveillance (《用人單位職業健康監護監督管理辦法》), the Measures for the Administration of Occupational Health Examination and the Law of the People’s Republic of China on Road Traffic Safety (《中華人民共和國道路交通安全法》). During the Reporting Period, the Group did not violate any laws and regulations in relation to safe production.

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Safety first
Prevention- Safe production Human-
focused policy oriented
Integration
of prevention
and governance
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SAFE PRODUCTION

The Group continues to strengthen safety management, lays a solid foundation for safety, and strengthens risk management and control to prevent safety accidents and achieve safe production. In order to improve the level of safety management and ensure the safety of our employees, the Group has established the HSE Committee, which is responsible for providing advice and assistance to the Board on matters including health and safety issues. The Group operates a health, safety and environment (HSE) management model, formulates and implements a comprehensive safety management system, including pre-event identification and assessment, in-process inspection and review, and post-event evaluation on safety operations, fire protection, occupational health, traffic safety, public security aspects, and constantly updates and improves safety management.

The Group has formulated the Safe Production Management System (《安全生產管理制度》), the Occupational Health Management System (《職業衛生管理制度》), and the Environmental Protection Management System (《環境保護管理制度》) to regulate the basic safety of the Group in the management process. These documents regulate the key points of

Environmental, Social and Governance Report 2020 E-COMMODITIES HOLDINGS LIMITED

IV. ENSURE SAFE PRODUCTION

safety management including safety production responsibility system, safety production rules and regulations, safety production investment, safety production organization and personnel requirements, safety production education, accident management, team safety management, and safety operation procedures, and each subsidiary is required to formulate corresponding systems and implement management. Since the operation of the Group’s occupational health and safety system, safety management has been improved day by day, and the safety awareness of employees at all levels has also increased significantly.

Part of the systems related to the safety production of each subsidiary are as follows:

Safe Production Responsibility Management System

‧ Implement a safe production responsibility system, and clarify the responsibilities of all parties to ensure that the responsibility for safe production is assigned to individuals

Safe Production Policy and Target Index Management System

‧ Clarify the management requirements of the annual safe production targets and indicators, so that there are policies and targets for the work of each unit on safety, with code of conduct, standards for assessment, and a basis for rewards and punishments

Safety Production Inspection and Hidden Danger Investigation and Control System

‧ Standardize and institutionalize the inspection and control of hidden dangers in safe production, and establish a long-term mechanism for the inspection and control of hidden dangers in safe production to eliminate hidden dangers of accidents

Production Equipment and Safety Facilities Management System

‧ Adhere to the system management method of the whole production process, uphold the principle of continuous updating and transformation, and improving the level of safety technologies, and strengthen the safety management of equipment and safety facilities to improve the safety and reliability of production equipment

Accident Emergency Plan and Drill Management System

‧ Regularly revise emergency plans, organize emergency drills and knowledge learning, and maintain emergency equipment. Promptly take emergency measures and disposal work upon the occurrence of an accident

‧ Standardize the work process and specific operations of hazard identification, risk assessment and risk control, so as to minimize risks

14 E-COMMODITIES HOLDINGS LIMITED Environmental, Social and Governance Report 2020

ENSURE SAFE PRODUCTION

The Group attaches great importance to health and safety related work, and its subsidiaries are responsible for the implementation of relevant systems. The person chiefly held responsible in each subsidiary performs the following duties:

Establish and improve the enterprise safe production responsibility system
Organize the formulation of enterprise safe production rules and operating procedures
Organize the formulation and implementation of safe production education and training plans in the unit
Ensure the effective implementation of enterprise safe production investment
Supervise and inspect the safe production work of the enterprise, and eliminate the hidden dangers of production safety accidents in time
Organize the formulation and implementation of emergency rescue plans of enterprise for production safety accidents
Report production safety accidents in a timely and truthful manner

In order to continuously strengthen the supervision and inspection of safe production, the Group stipulates that each subsidiary shall implement on-site safety supervision and inspection including the following contents and keep a record of safety supervision and inspection:

Implementation of safe production rules and regulations and safe operation procedures
The use of labor safety protection products
Special operating personnel holding valid certificates to work
Rectification of potential safety hazards

Subsidiaries’ investment in safeguarding health and safety of employees includes: perfecting, transforming, and maintaining safety protection equipments; providing safe production education and training and equipping with labor protection supplies and emergency rescue materials; carrying out safe production inspections, safety evaluations, accident hazard assessment and rectification; preventing occupational hazards, detecting and monitoring occupational hazard factors, and performing occupational health examination; organizing emergency rescue drills; equipping with safety signs and labels; conducting assessment and rectification for hazard sources and hidden dangers.

In order to protect the physical and mental health of employees and prevent occupational hazards, the Group invests more than RMB1 million each year in the work in respect of the health and safety of employees. The Group regularly organizes health checkups for all employees every year, and arranges health lectures and health knowledge popularization from time to time. In addition to paying full social insurance for all employees, it also buys additional medical insurance and accident insurance for employees.

Environmental, Social and Governance Report 2020 E-COMMODITIES HOLDINGS LIMITED

IV. ENSURE SAFE PRODUCTION

Occupational Set up or designate an occupational health management agency or organization with full-time or part-time occupational health professionals to be responsible for the prevention and control of Health occupational diseases of the unit; Management Formulate occupational disease prevention and control plans and implementation scheme;

Establish and improve occupational health management system and operating procedures;

Establish and improve the detection and evaluation system of occupational hazard factors in the workplace; Establish and improve the emergency rescue plan for hazard accidents of occupational disease

PROTECT EMPLOYEES’ HEALTH DURING THE PANDEMIC

The breakout of the global COVID-19 pandemic in 2019 has severely challenged human health and social and economic development. In the face of the COVID-19 pandemic, the Group quickly formulated and implemented prevention and emergency plans, and increased investment in the fight against the pandemic, in order to protect the health of employees and maintain normal production.

Control the number of staff in the workplace and reduce staff’s movement:
。 From February to June 2020, the Beijing office adopted home office and shift work means to control the number of office staff and ensure the health and safety of employees
。 During the period of pandemic prevention and control, closed management was conducted in the factory area to reduce the movement of personnel, and returning personnel were quarantined. It was required that employees in the factory do not go out or eat together, and minimize gatherings
Disinfect the workplace and formulate pandemic prevention measures:
。 Beijing office conducted daily disinfection in key areas. During the severe pandemic period in March 2020, drivers were arranged to pick up and drop off employees daily to reduce the chance of employees taking public transportation
。 Subsidiaries disinfected public areas such as staff dormitories, canteens, and bathhouses every day; staff canteens canceled meals in public areas and offered meals at staggered times, and workers in the factory went back to their dormitories to eat
。 Employees were required to wear masks in public places

16 E-COMMODITIES HOLDINGS LIMITED Environmental, Social and Governance Report 2020

ENSURE SAFE PRODUCTION

Monitor, register and report personnel temperature:
。 Each unit monitored and registered daily temperature of employees and reported in a timely manner
Provide employees with anti-pandemic supplies:
。 Distributed 624,405 masks to domestic and foreign subsidiaries for use by employees, and donated to local Red Cross Society and important partners
。 Employees were provided with anti-pandemic supplies such as alcohol and disinfectant
。 During the period of working from home, the Beijing office delivered masks to the employees’ homes
Provide pandemic prevention and control knowledge and health tips:
。 We published health reminders, knowledge of pandemic prevention and control, and medical guidelines in a timely manner via methods such as WeChat groups, to publicize key content such as “symptoms of infection with the COVID-19” and “how to protect” to guide employees to correctly understand the COVID-19

Case: Urad Zhongqi Haotong Clean Energy Co., Ltd. actively carried out pandemic prevention and control work

In the face of the complex and changeable COVID-19 and the severe local plague, Urad Zhongqi Haotong Clean Energy Co., Ltd., a subsidiary of the Group, formulated work plans for the prevention and control of COVID-19 and plague, and established a normalized prevention and control working group. It deployed and implemented relevant control measures, such as inspection report system, cleaning and disinfection work, and personnel management and education, to achieve scientific prevention and control and precisely implement policies as a way to ensure employee health and safety.

Environmental, Social and Governance Report 2020 E-COMMODITIES HOLDINGS LIMITED 17

IV. ENSURE SAFE PRODUCTION

Case: Urad Zhongqi Yiteng Mining Co., Ltd. implemented various anti-pandemic and prevention measures

Urad Zhongqi Yiteng Mining Co., Ltd., a subsidiary of the Group, actively carried out pandemic prevention and control and implemented various anti-pandemic and prevention measures, including disinfection of overseas customs clearance vehicles at Gants Mod Port to reduce the risk of virus transmission.

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E-COMMODITIES HOLDINGS LIMITED Environmental, Social and Governance Report 2020

ENSURE SAFE PRODUCTION

SAFETY TRAINING

Safe production education is an important part of safety management. The Group has formulated an annual safety production educational training plan in accordance with the System of Promotion, Education and Training for Prevention and Control of Occupational Hazards. The Group requires all employees of production units to attend safety training, and the person with chief responsibility together with safe production management personnel must possess corresponding safe production knowledge and management capabilities and obtain corresponding qualification certificates. When entering the factory, new recruits should receive three-level safety education, including safety education at the company, department, and team level. Special operations personnel (including, among others, electricians, motor vehicle drivers in the factory and mechanical operators) must attend specialist safety knowledge training before commencing their duties and participate in periodic reviews.

RESOURCES INVESTED IN HEALTH AND SAFE PRODUCTION IN 2020:

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Supply chain logistics segment Clean raw materials processing segment
Expenditure (RMB) 200,000 200,000
Total participants trained 350 200
Total hours trained (hours) 70 60
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Safety education and training

Environmental, Social and Governance Report 2020 E-COMMODITIES HOLDINGS LIMITED

IV. ENSURE SAFE PRODUCTION

During the Reporting Period, the Group launched a video contest on operation specifications for employees, so as to collect videos of operation specifications and accident-prone reminders taken by employees in order to improve employees’ safety awareness.

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Safety Video Contest

E-COMMODITIES HOLDINGS LIMITED Environmental, Social and Governance Report 2020

ENSURE SAFE PRODUCTION

SAFETY PERFORMANCE

During the Reporting Period, the Group formulated and implemented the safety management objectives and indicators for the Year 2020, and earnestly inspected and examined the equipment on a regular basis. The operating staff with certificates have been trained regularly to work to prevent fire, explosion, serious injury and more serious accidents.

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Expectation
No. Type of Indicator Indicator Unit 2020 2019 2018
Value
Fatality in the course
1 person 0 0 0 0
of production
Serious injury in the course
2 person 0 0 0 0
of production
Slight injury in the course
3 person 0 0 0 ≤10
of production
Production
4 Lost days due to work injury day 0 0 0 0
(including occupational
health and safety) Accident related to large
5 person 0 0 0 0
equipment
Explosion of pressure vessel
6 person 0 0 0 0
(including boiler)
Identified occupational disease
7 (fire and accident of explosion person 0 0 0 0
in production)
Accident of explosion of
inflammable materials (fire
7 Fire Safety management case 0 0 0 0
and accident of explosion in
production)
8 General and food poisoning case 0 0 0 0
Public health safety Outbreak of infectious
9 diseases of Class I and Class time 0 0 0 0
II
Transportation safety
10 General and traffic accident case 0 0 0 ≤2
management
Safety education and Rate of three-tier safety
11 % 100% 100% 100% 100%
training education
Safety inspections and Monthly safety inspection
12 rectifications of hidden at the Company’s level and % 99% 100% 100% 100%
dangers completion rate of rectification
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Environmental, Social and Governance Report 2020 E-COMMODITIES HOLDINGS LIMITED 21

V. PRACTICE ENVIRONMENTAL PROTECTION OPERATIONS

The Group continues to strengthen environmental management to promote pollution control and emissions reduction. We have formulated the Compilation of Environmental Protection Management System (《環境保護管理制度彙編》) and Energy Management System (《能源管理制度》) based on national and local laws and regulations including, among others, the Protection Law of the People’s Republic of China, the Law of the People’s Republic of China on the Prevention and Control of Atmospheric Pollution, the Law of the People’s Republic of China on the Prevention and Control of Environmental Pollution Caused by Solid Wastes, the Law of the People’s Republic of China on Prevention and Control of Environmental Noise Pollution, the Cleaner Production Promotion Law of the People’s Republic of China, and the Law of the People’s Republic of China on Prevention and Control of Water Pollution, to further regulate the environmental management of construction projects, prevention, control and management of air pollutants and water pollution, management of solid waste, as well as management of environmental pollution accidents. By doing this, we strive to continuously improve the efficiency of resource use and reduce emissions, in order to reduce the burden on the environment, and earnestly fulfill the environmental protection responsibilities of the Group. During the Reporting Period, the Group did not have any violations of the above-mentioned laws and regulations related to waste gas and greenhouse gas emissions, pollution to water and land, and waste generation and disposal.

POLLUTION CONTROL AND EMISSION REDUCTION

The Group is committed to promoting the move towards a highly efficient, environmentally-friendly, digitalized and intelligent logistics industry. In order to promote the development of transit transportation at Sino-Mongolian ports to an efficient and ecofriendly logistics, the Group has developed management systems including the Solid Waste Management System (《固體廢物管理制度》) and Environmental Management System Compilation (《環保管理制度彙編》), and addressed environmental pollution issues caused by coal transportation, loading and unloading, and warehousing processes at Sino-Mongolian ports through “non-containerised to container”, “closed coal sheds”, “multimodal transport”, “digitalized reconstruction” and other practical improvements during the Reporting Period.

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E-COMMODITIES HOLDINGS LIMITED Environmental, Social and Governance Report 2020

PRACTICE ENVIRONMENTAL PROTECTION OPERATIONS

During the Reporting Period, the total transportation volume of the Group reached 5.924 million tonnes, of which freight train deliveries reached 2.413 million tonnes, with a total of 684 deliveries. The annual production capacity of the coal washing and allocation centers reached 2.6339 million tonnes. The transportation volume of each logistics transportation model and the production capacity of each coal washing and allocation center are as follows:

Transportation Volume in 2020 (ten thousand tonnes)

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Motor vehicles
241.3 Containers
18.5 Large gondola car
191 401.4 Small gondola car
141.6
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Production Capacity of Coal Washing and Allocation Centers in 2020 (ten thousand tonnes)

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10.49
43.73 Zhongqi
Salaqi
Longkou
209.17
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Environmental, Social and Governance Report 2020 E-COMMODITIES HOLDINGS LIMITED

V. PRACTICE ENVIRONMENTAL PROTECTION OPERATIONS

The coal washing process may produce dust, sewage, solid waste, noise and other environmental impacts. In order to reduce the impact, the Group has conducted an environmental impact assessment, and constructed environmental protection equipment and facilities and auxiliary structures for environmental protection projects in accordance with national environmental protection requirements such as the Law of the People’s Republic of China on Environmental Impact Assessment. Meanwhile, we formulated the Administrative Measures for Safety and Environment of New Projects, Reconstruction Projects and Expansion Projects to strengthen the control and management of these projects in the bases and their design, implementation and acceptance process as a way to ensure compliance with national and local emission standards.

With the continuous promotion of the concept of environmental protection, the Group has gradually improved coal warehousing and transportation methods. Railway container transportation has multiple advantages, including environmental protection and reduction of transportation losses. Therefore, the Group vigorously promotes related logistics practices to reduce environmental pollution and improve logistics efficiency.

Environmentally Friendly

‧ Using container transportation for bulk loading cargo containerized transportation, pithead packing, and destination unpacking. Coal in the container will not fall out during transportation thus avoiding the problem of dust pollution from coal transportation, loading and uploading and warehousing

Reducing Cargo Damage

‧ Enclosed transportation
‧ Cargoes were fully enclosed all the way from the mine pitheads to domestic bonded zones, significantly reducing cargo damage

Real-time Positioning

‧ Location and status of containers were monitored, realizing the purpose of safety supervision throughout the transportation process and improvement in efficiency of customs clearance

Pendulum Transportation

‧ Container resources were fully utilized to optimize the transportation layout in order to maximize profit and reduce cost for upstream and downstream enterprises

Multimodal Transportation

‧ Multimodal transportation by road, railway and sea can avoid losses caused by multiple loading and unloading of goods, so as to achieve optimal performance

24 E-COMMODITIES HOLDINGS LIMITED Environmental, Social and Governance Report 2020

PRACTICE ENVIRONMENTAL PROTECTION OPERATIONS

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The main pollutant generated by the production business of the Group is dust. The Group reduces dust generation and emissions through various aspects of production and transportation. In response to the national environmental protection policies, the Group has actively carried out “non-containerised to container” to reduce coal transportation by gondola wagons. During the Reporting Period, more than 10,000 containers were put into use. These containers were widely used in cross-border transportation at ports and container transportation by railways to reduce dust emission.

Environmental, Social and Governance Report 2020 E-COMMODITIES HOLDINGS LIMITED

V. PRACTICE ENVIRONMENTAL PROTECTION OPERATIONS

Dust reduction at the source

‧ Full implementation of site hardening on outdoor storage areas, with the coals continuing to be covered by crepe or sprayed with crust-forming dust suppressant to reduce the spread of coal dust
‧ Phased adoption of closed containers to replace the outdoor storage model and increase the proportion of transportation by container
‧ Adoption of closed-type coal sheds for processes such as coal storage and loading and putting fast loading station into service
‧ To exercise strict speed limit of 5km/h on vehicles entering relevant venues
‧ To gradually change the form of transportation - coal from foreign coal storage yards in Mongolia are directly dispatched to domestic train stations through cross-boundary transportation to reduce pollution arising from the second unloading

Active dust reduction

‧ Full operation of dust-reducing facilities and increase the frequency of water spraying in the factory to reduce dust
‧ To increase the frequency of coal dust cleaning

Operation to avoid dust

‧ In case of bad weather such as strong winds and sandstorms, coal storage venues will suspend loading work
‧ In severe pollution weather, stop part or all of the operations to prevent aggravation of air pollution

E-COMMODITIES HOLDINGS LIMITED Environmental, Social and Governance Report 2020

PRACTICE ENVIRONMENTAL PROTECTION OPERATIONS

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Closed coal sheds of Urad Zhongqi Yiteng Mining Co., Ltd.

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Eco-friendly coal sheds of Ulanqab Haotong Energy Co., Ltd. (烏蘭察布市浩通能源有限責任公司)

Environmental, Social and Governance Report 2020 E-COMMODITIES HOLDINGS LIMITED

V. PRACTICE ENVIRONMENTAL PROTECTION OPERATIONS

Wastewater generated by the Group was mainly domestic sewage, which was discharged after being treated in septic tanks and oil separator devices, and the corresponding discharge indicators were strictly controlled to meet relevant standards. Wastewater treatment facilities and equipment including water pools and wastewater treatment tanks were repaired and maintained by the Group in accordance with regulations. Anti-leakage measures for toxic and hazardous liquids such as mineral oil, paint and acid were adopted to prevent leakage or potential leakage.

The Group strengthened the operation and management of facilities generating sewage and waste gas and related pollution treatment facilities, and prevented the direct discharge of sewage and waste gas without treatment or due to equipment failure.

The Group generates solid waste in the production process, of which the supply chain logistics segment mainly generates automobile tires and waste parts, and the clean raw materials processing segment mainly generates waste such as gangue. Pursuant to the Administrative Measures for Solid Waste of the Group, when collecting, storing, transporting, utilizing and disposing of solid waste, measures must be taken to prevent dispersal, loss and spillage. Solid waste shall not be disposed of, stacked, discarded or scattered without authorization but shall be dumped at designated locations for classification and immediate cleaning. Meanwhile, production units were required to actively participate in the recycling of industrial solid waste generated, with their own economic and technical conditions taken into account. For automobile tires and used parts, the Group repairs and utilizes the usable parts, and sells the unusable parts to scrap purchasers. The Group conducts external sales for the by-product gangue generated in the production process. Part of the gangue is used for road paving in the factory, and coal dust scattered from vehicles is cleaned by a dust collector and recycled.

MAKE GOOD USE OF RESOURCES

The production process of the Group mainly consumes electricity and diesel fuel for the production activities of the clean raw materials processing segment and the supply chain logistics segment. The Group obtains water resources for production and daily use through the municipal water supply without difficulty in obtaining water. In order to save and rationally use resources, the Group formulated the Energy Management System to regulate measures for various energy use and water resources utilization, and established an energy management system to clarify planning, supervision, approval and other matters. The Group stipulates that the national standard Technical Guides for Evaluating the Rationality of Electricity Usage in Industrial Enterprise (GB/T3485) is implemented as a guideline for the rational use of electricity by enterprises. In terms of water use, each subsidiary is required to formulate water use plans and adopt water-saving measures.

The Group strictly manages and monitors electricity consumption for production by formulating electricity consumption plans on a regular basis, continuously monitors the energy consumption of each production link, and conducts assessments for units. It strictly approves and controls new and temporary electricity consumption, and actively promotes various power-saving measures and new technologies. During the Reporting Period, the Group replaced more energy-efficient production equipment such as stacked screens, and installed frequency converters on coal feeders, flotation pumps and other equipment to reduce energy consumption by 30%.

28 E-COMMODITIES HOLDINGS LIMITED Environmental, Social and Governance Report 2020

PRACTICE ENVIRONMENTAL PROTECTION OPERATIONS

In order to reduce the fuel consumption of transportation vehicles and save energy, the Group implements comprehensive energy management measures for vehicles, including: establishing a refueling record system for each vehicle; adopting economical speed for container vehicles; conducting comprehensive cost accounting and analyzing monthly energy usage of each vehicle; reminding and training drivers whose fuel consumption exceeds the empirical value.

The Group requires strengthening water management, and continuously improves the efficiency of circulating water treatment. It uses circulating water systems as much as possible to reduce the usage of fresh water and strive to achieve zero discharge of waste water. Meanwhile, it uses reclaimed water to spray roads to reduce dust and takes measures such as posting watersaving signs to reduce domestic water consumption. The Group requires all water-using units to formulate water-use plans and take water-saving measures. Among them, the water reuse rate of the production workshop must reach more than 90%, and for other units, the rate must reach more than 50%. Efforts are made to strengthen the management and maintenance of water supply, water usage facilities and appliances. The water leakage rate of the water-using units should be controlled below 1%.

Case: Water reuse measures for coal washing

In order to implement the water-saving policies of the Group, Urad Zhongqi Haotong Clean Energy Co., Ltd. established a leading group for the management of reused industrial water for washing to actively control and rationally use the reused industrial water for washing, and implemented various measures, as follows:

Strengthen the environmental protection awareness of personnel, and publicize the importance and necessity of industrial reuse of water
The coal washing plant adopts a closed loop method for washing, and in principle, it is not allowed to add circulating water at will
Maintain the equipment of slime water system to prevent running, spraying, dripping and leaking
Conduct water balance test, and the utilization rate of industrial reused water reaches more than 75%

Environmental, Social and Governance Report 2020 E-COMMODITIES HOLDINGS LIMITED 29

V. PRACTICE ENVIRONMENTAL PROTECTION OPERATIONS

GREEN OFFICE

The Group adheres to the concept of environmental friendliness and harmonious development, advocates green office measures, and is committed to improving the office environment and building a garden-style enterprise. In order to continuously promote energy conservation and emission reduction and achieve the target of energy conservation, the Group formulates the Targets for Energy Conservation and Reduction of Emissions every year as a way to require all subsidiaries to carry out energy conservation and emission reduction in offices in accordance with the requirements of the Group. Taking the year of 2019 as the baseline, the conservation targets in 2020 requires to achieve:

Electricity saving target of 100 kWh per capita
Water saving of 6 tonnes per capita
Fuel consumption within 12.5 liters per 100 km, and vehicle consumption cost reduced by 5%
Office supplies saving of RMB100 per capita

The Group requires employees to turn off the lights when leaving and turn off computers, printers, electric kettles and other electrical facilities when off work; the air-conditioning temperature in summer is set not lower than 26 degrees; official vehicles are minimized and employees are encouraged to use public transportation to reduce vehicles emissions except in exceptional cases such as the pandemic. The Group also posts water-saving signs in office buildings to encourage employees to save water.

The waste generated by the Group in the office mainly includes waste paper, ink cartridges, and domestic waste. In order to reduce the generation of office waste such as waste paper and ink cartridges, the Group promotes the electronification of daily office procedures instead of using paper, and encourages employees to print on both sides and reuse of waste paper, such as sticking receipts, and collects waste paper for recycling. For other waste including domestic waste, the Group will hand over recyclable waste to recyclers for recycling and processing, and non-recyclable waste will be placed in designated waste collection locations.

Through the promotion and implementation of various environmental protection and emission reduction measures, the Group has successfully achieved the targets of energy-saving and emission-reduction in 2020, and will continue the energy-saving and emission-reduction work to further reduce the environmental impact of the Group’s operations.

CLIMATE CHANGE

Climate change poses a major risk to the global economy and affects all walks of life through physical risks (such as extreme weather) and transition risks (such as low-carbon policies). The Group pays attention to the impact of climate change on its business and continues to follow related risks and opportunities to better respond to climate change.

30 E-COMMODITIES HOLDINGS LIMITED Environmental, Social and Governance Report 2020

PRACTICE ENVIRONMENTAL PROTECTION OPERATIONS

The Group has formulated the Summer Emergency Plan (《夏季應急預案》), which lays down emergency plans for severe summer weather such as heavy rainfall, thunderstorms, and strong winds, and standardizes the prevention and response work of various departments so as to ensure the safety of life and property, and minimize losses.

Prevention of flood, thunderstorm, and electric shock: all departments are required to prepare flood prevention materials in advance, and check the status of electrical equipment, water proofing buildings, and lightning protection facilities before the flood season. During heavy rain, personnel should be positioned to increase surveillance to ensure the safe operation and maintenance of equipment. Personnel in various positions shall stay indoors as far as possible and stop outdoor operations according to actual conditions.
Windproof: check outdoor hanging objects to remove or reinforce by binding. All vehicles park at designated area to avoid other secondary accidents. Personnel shall stay indoors as much as possible and avoid walking under buildings. Before resuming production after strong winds, conduct a comprehensive inspection and confirmation of all production positions and equipment.

ENVIRONMENTAL PERFORMANCE

During the Reporting Period, we compiled environmental data on emissions and the use of resource of 40 subsidiaries[1] within the scope of this report.

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Name Unit Amount in 2020
Emission of air pollutant [2,3]
Nitrogen oxides (NOX) kilograms 62,615.83
Sulfur oxides (SOX) kilograms 11,492.55
Carbon monoxide (CO) kilograms 38,205.02
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1 Due to the expansion of the statistical scope, the environmental performance value may increase
2 The calculation method of air pollutant emission data is based on the Technical Guidelines for the Preparation of Emission Inventory from Road Motor Vehicles (Trial) (a small number of vehicles under the national six emission standards have not been updated because the calculation standards have not been updated, so they are calculated based on national five emission coefficient), the Technical Guidelines for the Preparation of Emission Inventory from Non-road Mobile Source (Trial) published by the Ministry of Ecology and Environment of the People’s Republic of China, the First National Survey of Pollution Sources on Urban Waste Source Discharge Coefficients Handbook and the First National Survey of Pollution Sources on Industrial Pollution Source Discharge Coefficients Handbook issued by the State Council, the EMEP/EEA Air Pollutant Emission Inventory Guidebook – 2016 published by the European Environmental Agency, and the Internal Combustion Engine Emission Estimation Technical Manual Version 3.0 (《內燃機排放估算技術手冊3.0版》) issued by the Department of Agriculture, Water and the Environment of Australia
3 Among the air pollutant emissions, the calculation scope of nitrogen oxides and sulfur oxides includes road mobile sources (vehicles), non-road mobile sources (construction machinery), boilers, canteen cooking in Mainland China, and road mobile sources (vehicles) in Hong Kong, Singapore and Australia; the calculation scope of carbon monoxide and fine particulates includes Group’s road mobile sources (vehicles) and non-road mobile sources (construction machinery) in Mainland China, as well as road mobile sources (vehicles) in Hong Kong, Singapore and Australia; the calculation scope of respirable particulate matter includes the Group’s road mobile sources (vehicles) and non-road mobile sources (construction machinery) in Mainland China, as well as road mobile sources (vehicles) in Australia; the calculation scope of smoke and dust includes boilers and canteen cooking in Mainland China.

Environmental, Social and Governance Report 2020 E-COMMODITIES HOLDINGS LIMITED 31

V. PRACTICE ENVIRONMENTAL PROTECTION OPERATIONS

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Name Unit Amount in 2020
Fine particulates(PM2.5) kilograms 2,487.59
Respirable particulate matter kilograms 2,697.19
(PM10)
Smoke and dust kilograms 1,598.99
Resource consumption and
intensity
Total electricity consumption kWh 31,537,883.05
Intensity of electricity consumption kWh/HK$’00,000,000 operating income [4] 106,086.03
Total consumption of liquefied kilograms 5,045.06
petroleum gas [5]
Intensity of liquefied petroleum kilogram/HK$’00,000,000 operating 16.97
gas consumption income
Total gas consumption [6] cubicle meters 1,143.76
cubicle meter/HK$’00,000,000 operating 3.85
Intensity of gas consumption
income
Total coal consumption tonnes 2,000.00
Intensity of coal consumption tonne/HK$’00,000,000 operating income 6.73
Total petrol consumption litres 347,057.42
Intensity of petrol consumption litre/HK$’00,000,000 operating income 1,167.42
Total diesel consumption litres 4,023,855.58
Intensity of diesel consumption litre/HK$’00,000,000 operating income 13,535.31
Total energy consumption [7] MWh 94,949.00
Intensity of energy consumption MWh/HK$’00,000,000 operating income 319.39
Total water consumption tonnes 148,238.40
Intensity of total water tonne/HK$’00,000,000 operating income 498.64
consumption
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4 During the Reporting Period, the operating revenue of the enterprises within the reporting scope of this report was HK$29.729 billion
5 The total liquefied petroleum gas consumption is mainly attributable to the liquefied petroleum gas used in the canteens of some of the Group’s subsidiaries

6 The total gas consumption is mainly derived from the gas used by some subsidiaries of the Group for canteen cooking and heating 7 The scope of total energy consumption includes the use of coal, gasoline, diesel, liquefied petroleum gas, gas and electricity by the 40 subsidiaries of the Group

32 E-COMMODITIES HOLDINGS LIMITED Environmental, Social and Governance Report 2020

PRACTICE ENVIRONMENTAL PROTECTION OPERATIONS

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Name Unit Amount in 2020
Volume and intensity of
greenhouse gases emission
Scope 1 [8,9] tonnes of carbon dioxide equivalent 14,801.76
Scope 2 [10] tonnes of carbon dioxide equivalent 19,250.45
Total emission of greenhouse tonnes of carbon dioxide equivalent 34,052.21
gases
Intensity of total emission of tonne/HK$’00,000,000 operating income 114.54
greenhouse gases
Volume and intensity of hazardous
wastes generated
Amount of waste tires, auto parts, tonnes 70.00
construction machinery parts
generated
Intensity of waste tires, auto parts, tonne/HK$’00,000,000 operating income 0.24
construction machinery parts
generated
Volume of waste battery generated kilograms 50.00
Intensity of waste battery kilogram/HK$’00,000,000 operating 0.17
generated income
Waste ink cartridges generated box 141
Intensity of waste ink cartridges box/HK$’00,000,000 operating income 0.47
generated
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8 The calculation scope of greenhouse gases (Scope 1) includes the Group’s road mobile sources (vehicles), non-road mobile sources (construction machinery), boilers, and canteen cooking in Mainland China, as well as road mobile sources (vehicles) in Hong Kong, Singapore, Japan, Mongolia and Australia, and gas use in Japan
9 The calculation method of greenhouse gases (Scope 1) emission data is based on the Greenhouse Gas Emissions Accounting Methodology and Reporting Guidelines for Land Transport Enterprises (Trial) (a small number of vehicles under the national six emission standards have not been updated because the calculation standards have not been updated, so they are calculated based on national five emission coefficient), the Technical Guidelines for the Preparation of Non-road Mobile Source Air Pollutant Emission Inventory (Trial), the Enterprise Greenhouse Gas Emissions Accounting and Reporting Guidelines – Other Industries (Trial), and the First National Survey of Pollution Sources on Urban Waste Source Discharge Coefficients Handbook published by the Ministry of Ecology and Environment of the People’s Republic of China, and the Guidelines to Account for and Report on Greenhouse Gases Emissions and Removals for Buildings (Commercial, Residential or Institutional Purposes) in Hong Kong (2010 Edition) jointly published by the Electrical and Mechanical Services Department and the Environmental Protection Department of Hong Kong, the 2008 National Greenhouse and Energy Report (Measurement) Assessment (《2008年國家溫室和能源報告(測量)評定》) of Australia, the Calculation Method and Emission Factor List in Calculation/Reporting/Publication System (《計算/報告/公佈系統中的計算方法和排放因子清單》) issued by the Ministry of the Environment of Japan, and the Calculation Tool for Greenhouse Gases Emissions from Combustion of Transport or Mobile Sources published by the Greenhouse Gas Protocol
10 The calculation scope of greenhouse gases (Scope 2) includes the use of purchased electricity by 40 subsidiaries of the Group. The calculation method of emission data is based on the average emission coefficient of the national power grid in 2015 in the Notice Regarding Carbon Emissions Reporting and Verification and Emissions Monitoring Program for the year 2018 published by the Ministry of Ecology and Environment of the People’s Republic of China, the “Carbon Calculator” from HK Electric Investments Limited, and the Calculation Tool for Greenhouse Gases Emissions from Purchased Electricity published by the Greenhouse Gas Protocol

Environmental, Social and Governance Report 2020 E-COMMODITIES HOLDINGS LIMITED

V. PRACTICE ENVIRONMENTAL PROTECTION OPERATIONS

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Name Unit Amount in 2020
Volume and intensity of non-
hazardous wastes generated
Volume of waste plastic bottles kilograms 500.00
generated
Intensity of waste plastic bottles kilogram/HK$’00,000,000 operating 1.68
generated income
Volume of waste paper generated tonnes 99.54
Intensity of waste paper generated tonne/HK$’00,000,000 operating income 0.33
Volume of domestic waste in tonnes 684.62
office generated [11]
Intensity of domestic waste in tonne/HK$’00,000,000 operating income 2.30
office generated
Disposed office supplies kilograms 100
Intensity of disposed office kilogram/HK$’00,000,000 operating 0.34
supplies generated income
Volume and intensity of solid
waste generated [12]
Volume of gangue generated tonnes 69,541.16
Intensity of gangue generated tonne/HK$’00,000,000 operating income 233.92
Volume and intensity of sewage
generated
Volume of sewage generated tonnes 20,332.35
Intensity of sewage generated tonne/HK$’00,000,000 operating income 68.39
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11 The data collection scope of domestic waste includes the amount of unwanted plastic bottles, waste paper, and disposed office supplies 12 Since the Group will produce by-product slime for external sales, slime will not be included in the statistical scope of solid waste

34 E-COMMODITIES HOLDINGS LIMITED Environmental, Social and Governance Report 2020

VI. CARE AND CULTIVATE TALENTS

Talents are valuable assets for corporate development. Adhering to the people-oriented approach, the Group is committed to providing employees with an equal, open, harmonious and mutually-assisting working environment, safeguards their rights and interests, and provides a broad platform for their growth.

TALENT RECRUITMENT

The Group strictly abides by the laws and regulations including, among others, the Labour Law of the People’s Republic of China, Labour Contract Law of the People’s Republic of China, the Production Safety Law of the People’s Republic of China, the Employment Promotion Law of the People’s Republic of China, the Labour Dispute Mediation and Arbitration Law of the People’s Republic of China, the Law of the People’s Republic of China on the Protection of Minors, the Social Insurance Law of the People’s Republic of China, the Individual Income Tax Law of the People’s Republic of China, the Law of the People’s Republic of China on the Prevention and Control of Occupational Diseases, the Regulation on the Implementation of the Employment Contract Law of the People’s Republic of China, Regulations on the Management of Employment of Foreigners in China, Regulations for the Recruitment of Personnel for Technical Professions, Special Regulations for the Protection of Female Workers. During the Reporting Period, the Group did not receive any report of events in violation of laws and regulations with respect to the recruitment, dismissal, remuneration, promotion, working hours, holidays, equal opportunity, diversity and antidiscrimination of employees, and there is no use of child labor or forced labor.

The Group has formulated the Human Resources Management System, which covers recruitment, salary, incentives, selection and deployment, training and development, cross-regional management policies, and supervision policies, and has established communication channels with employees. The Group opposes any form of discrimination to protect the rights and interests of employees. The Group implements standardized management of the personnel work of subsidiaries in various regions. When recruiting, it mainly adopts local recruitment supplemented with group deployment. In accordance with the business management needs and the requirements for comprehensive training of the management of the Group, job exchanges are conducted among key employees of subsidiaries in different areas to provide employees with a broad space for growth.

The Group adheres to the recruitment policy of taking into account of morality, avoidance of relatives’ interference, teamwork, professionally focused, putting less emphasis on formality and scientific evaluation, and the principles of open recruitment, equal competition, merit-based admission, and internal first in recruitment. In order to ensure the Group’s ability to select various talents in a scientific and reasonable way and to recruit them in a timely and effective manner, the Group has established a talent assessment system which covers the assessment method, assessment indicators, assessment contents and assessment task force to assess candidates. After candidates passing the assessment, both parties sign labor contracts in accordance with regulations.

Environmental, Social and Governance Report 2020 E-COMMODITIES HOLDINGS LIMITED

VI. CARE AND CULTIVATE TALENTS

The Group continues to carry out human resource planning to analyze the current situation of human resources, and formulates phased human resource targets and plans to meet the requirements of the Group’s dynamic management. The Group actively recruits senior talents to meet its talent needs. The formulation of internal competition management measures for key positions enables the Group to find suitable substitutes by conducting internal competitive selection when key positions are vacant, so as to fully tap the internal talents of the Group and optimize the allocation of human resources with the introduction of competition mechanism. The Group cultivates backup personnel to whom the priority will be given for job rotation, training and promotion opportunities, so as to reserve high-potential talents who can take over key positions and have cultivating value for the long-term development of the Group.

The Group prohibits the employment of child labor and forced labor, and has formulated the Elimination of Child Labor and Forced Labor System (《杜絕童工及強制用工制度》) for management. When recruiting, the Group will verify the information of applicants to ensure that they are at least 16 years old, and properly keep the relevant employment registration and verification materials so as to resolutely eliminate the employment of child labor. If child labor is found, the Group will immediately take remedial measures, including reporting to the local labor department, immediately stopping their work and undergoing a physical examination. With the confirmation of the labor department, the Group will pay salaries and designate personnel to escort them home. It will find out the reasons and strictly hold the relevant personnel accountable. In terms of preventing forced labor, the Group also implements relevant management measures. During the recruitment process, the Group clarifies the labor relationship by signing labor contracts with employees, and based on the principle of fairness and voluntariness, prohibits any forced or deceptive means to recruit employees. The Group strictly prohibits seizure of valid documents of employees such as ID cards, collection of deposits, and any violent means to force employees to work or making illegal requests. Once discovered, such issues will be dealt with in accordance with factory regulations, and if serious consequences are caused, they will be sent to the public security department for processing.

36 E-COMMODITIES HOLDINGS LIMITED Environmental, Social and Governance Report 2020

CARE AND CULTIVATE TALENTS

As at 31 December 2020, there were 1,119 full-time employees in the Group (no part-time employee). The number of employees by different categories is as follows:

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Number of employees by education
Number of employees by gender (person)
background (person)
Diploma and below
Female 897
159
Undergraduate
Male
168
960
Master
54
Number of employees by age (person)
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Below 35
157
35 to 44
906
Above 44
56
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Environmental, Social and Governance Report 2020 E-COMMODITIES HOLDINGS LIMITED

VI. CARE AND CULTIVATE TALENTS

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Number of employees by region
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----- Start of picture text -----

825
121
90
6 3 5 3 13 8 15 6 16 4 4
Beijing Shanghai JiangsuInner Mongolia Tianjin Liaoning Shandong Zhejiang Hong Kong Macau Mongolia Singapore Japan Australia
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In order to achieve the goals of high efficiency and environmental protection, the Group has conducted independent operation of the cross-border container transportation business at the Sino-Mongolia border ports since October 2020. The Group has successively recruited 797 Mongolian cargo truck drivers for this business.

38 E-COMMODITIES HOLDINGS LIMITED Environmental, Social and Governance Report 2020

CARE AND CULTIVATE TALENTS

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Employee turnover rate
By gender By age group
16.56%
8.93%
Male Female
3.96% 5.66% 1.77%
Below 35 35 to 44 Above 44
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By region

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----- Start of picture text -----

66.67%
50.00%
25.00%
16.53%
15.56%
7.69%
0.36%
Beijing Shanghai Jiangsu Inner Mongolia Shandong Mongolia Singapore
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Environmental, Social and Governance Report 2020 E-COMMODITIES HOLDINGS LIMITED

VI. CARE AND CULTIVATE TALENTS

TALENT CARE

The Human Resources Management System of the Group stipulates remuneration, working hours, holidays and other treatment and benefits, so as to provide employees with reasonable and diversified remuneration, benefits and various holidays. The Group adheres to a principle of standardized management, job-based remuneration, and leading remuneration to manage remuneration. It fully pays social insurance for all regular employees in a timely manner, and pays commercial accident insurance for all staff. Through the incentive policies of paying equal attention to spirit and material, enhancing the sense of belonging of the team, emphasizing the development of personality, prompting rewards, and encouraging innovation, we actively provide employees with comprehensive benefits, effectively enhance their happiness, and inspire their sense of mission and dedication. The working hours of the Group are based on the actual conditions of subsidiaries in various regions. The daily working hours of subsidiaries in first-tier cities are 7.5 hours.

Employees in different places enjoy various statutory holidays, paid annual leave, personal leave, sick leave, public leave[13] , wedding and funeral leave, maternity leave, paternity leave, breastfeeding leave, family visit leave and other leave according to national regulations. During the statutory holidays, the Group will arrange employees to rest taking into consideration production needs, and employees who need to be on duty due to production needs will be arranged to exchange working days and holidays. The Group has formulated an overtime management system, the detailed implementation rules of which are explained in the attendance system and employee handbook of each subsidiary. For those who need to work overtime, employees must fill in an overtime application and may work overtime upon the application being approved. The Group will provide compensatory leave or pay overtime compensation to employees who work overtime.

13 Public leave refers to holiday approved by the unit to participate in meetings, training and social activities, etc.

40 E-COMMODITIES HOLDINGS LIMITED Environmental, Social and Governance Report 2020

CARE AND CULTIVATE TALENTS

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Walking Activity

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Annual Party

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Employee Birthday Party

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----- Start of picture text -----

Employees enjoy musical play in a theater
at the Golden Autumn Art Party
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Environmental, Social and Governance Report 2020 E-COMMODITIES HOLDINGS LIMITED

VI. CARE AND CULTIVATE TALENTS

TALENT TRAINING

The Group has formulated and improved the training system to provide talent support for the development of the Group, and is also committed to providing employees with a broad development platform. The Group encourages and supports employees to continuously improve their own abilities. By providing various forms of training resources, development platforms, and appropriate job opportunities, the Group combines employee development with corporate growth to meet the needs of change and innovation.

The Human Resources Management System of the Group stipulates training-related work, and deploys the training responsibilities and arrangements of various departments. The training process includes the demand survey before the training, the formulation of the annual training plan, the implementation of the training, and the effect evaluation and summary after the training. Taking the “Winsway Training Academy (永暉培訓學院)” as a platform, the Group has built a training course system that conforms to the corporate culture and characteristics, so as to enhance the overall management level and competence of key positions. The training are mainly categorized into “management training”, “knowledge and skills training” and “corporate culture training”, and are carried out through internal training, external training, online training and event training. In 2020, on the basis of Winsway Training Academy, the Group sorted out and built “Winsway Training Classroom (永暉培訓教室)” to enrich and refine various training courses, and carried out various training activities accordingly.

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★ Training system construction:Winsway Training Classroom
Senior level
1. Target: senior management
(executive directors, heads of first-level departments)
2. Goal: broaden horizons and accumulate
human resources
3. Content: conference forums, high-end courses
＊Some courses can be extended to the middle level
General ★Professional Corporate Production
management field culture training
1. Target: middle management 1. Target: core and key positions 1. Target: employees serving less than 5 1. Target: senior, middle and
(general managers and 2. Goal: familiar with the years grass-roots employees of
manager assistants of Company’s business and 2. Goal: fully understand the corporate production and processing
various departments) improve professional skills culture and better integrate into the enterprises
2. Goal: meet the job 3. Content: Company 2. Goal: improve the level of
competency requirements  Core business knowledge 3. Content: front-line management and
Lifestyle 3. Content: training (coal washing, logistics Lecturer: senior management, old staff promote production
 Leadership training and transportation, international  Corporate history 3. Content:
 Reading, film exchange  Communication and trade, etc.)  Corporate culture keywords  Team leader training
 Photography, floristry, influence training  Professional knowledge training  Policies and measures of the Company  Safe production training
beauty activities  Self-management training (finance, human resources, law,  New employee training  Benchmark visit
 Sports such as walking Health, childcareand mountaineering financing, etc.) 3. Activities:  New employees go on business trips Old and new outingwith old employees
1. Implementation of training
2. Training form (online, offline)3. Faculty (external, internal)(real-time assessment, appraisal, effect tracking) Basic skills 1. Training object:  Grass-roots clerk Frontline workers 2. Courses:  Professional training (office software, IT skills, On-the-job training (machine operation, business etiquette, etc.)
4. Expense management safety regulations, process flow)
(budget, course remuneration, training subsidy)
mid- level
grass-roots
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42 E-COMMODITIES HOLDINGS LIMITED Environmental, Social and Governance Report 2020

CARE AND CULTIVATE TALENTS

During the Reporting Period, the training activities carried out by the Group were as follows:

★ Training/Staff Activities of E-Commodities (Beijing) Supply Chain Management Co., Ltd. in 2020

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Introduction to
financial statements
and annual reports EQ influence training
on 29 October on 18 December
Coal quality and Mongolian legal Training on improving
Coal knowledge coal processing New knowledge training corporate safety
training during the pandemic training on 8 July orientationemployee on 23 October operation capabilityon 1 December
January February March April May June July August September October November December
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Training on Official Document Writing
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----- Start of picture text -----

New Employee Training
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----- Start of picture text -----

Online Safety Training
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----- Start of picture text -----

Emotion Management Training
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Environmental, Social and Governance Report 2020 E-COMMODITIES HOLDINGS LIMITED

VI. CARE AND CULTIVATE TALENTS

During the Reporting Period, the percentage of employees trained was as follows[14] :

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Percentage of employees trained by gender Percentage of employees trained by employee category
75.77%
Male Female 22.69%
1.54%
61.92% 38.08%
Senior Middle Basic
Average training hours by gender Average training hours by employee category
Hour Hour
3.18
1.33
Male Female 1.05
2.6 1.6
Senior Middle Basic
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14 In 2020, we adjusted the calculation method of the percentage of employees trained in accordance with the relevant guidelines of the Hong Kong Stock Exchange. The calculation method was adjusted to: percentage of employees trained by relevant category = number of employees trained by relevant category/total number of employees trained.

E-COMMODITIES HOLDINGS LIMITED Environmental, Social and Governance Report 2020

VII. IMPROVE QUALITY CONTROL

The Group adhered to integrity operation and put quality assurance first. The Group strictly complied with laws and regulations, upheld integrity and self-discipline, and protected the legitimate rights and interests of enterprises and shareholders. We took customer needs as the starting point, strictly controlled product quality, improved service standards, and continuously created social and economic benefits to safeguard the stable operation of the Group.

INTEGRITY MANAGEMENT

The Group strictly complied with the provisions of the Criminal Law of the People’s Republic of China, the Anti-Money Laundering Law of the People’s Republic of China and other regulations on prevention of bribery, extortion, fraud and money laundering, and formulated and implemented the Conflicts of Interest Policies and Anti-fraud Policies to strengthen internal anti-fraud monitoring efforts. The discipline inspection and supervision were performed by the technical supervision department to regulate the occupational conduct of the Company’s president, directors, management and employees, supervise each business department and subsidiary. The technical supervision department received and handled complaints and reports, and dealt with any behavior that violated regulations and damaged the interests of the Company with zero tolerance. In order to prevent conflicts of interests, the Group regulates and guides the relevant content of personal business ethics in the employee handbook. The Group has strictly complied with relevant laws, industry norms and standards, occupational ethics and company rules and regulations so as to facilitate a favorable atmosphere for integrity and diligence and prevent behaviors that damage the interests of the Company and shareholders.

During the Reporting Period, the Group did not receive any report of events in violation of laws and regulations with respect to bribery, extortion, fraud and money laundering, and there were no concluded legal cases of corruption against the Company or its employees.

Environmental, Social and Governance Report 2020 E-COMMODITIES HOLDINGS LIMITED

VII. IMPROVE QUALITY CONTROL

The disciplinary inspection and supervision department are responsible for handling the use of deception and other illegal means by internal and external individuals to seek personal illicit interests, and damage the legitimate economic interests of the Company, or an act to seek illegitimate economic interests of the Company and likely bring illegitimate interests to individuals. Employees may report concerns and information regarding frauds and violations committed by relevant companies, employees, or company agencies to the audit committee of the Board and (or) the supervisor of the technical supervision department and the head of the Human Resources Department through various channels including on-site monitoring and inspection, visits, letters, reporting calls, emails. Reporting matters include but are not limited to:

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• Violations of the Company’s regulations and systems, provisions and employee code; acceptance of bribes and kickbacks;
illegal use of the Company’s assets, corruption, embezzlement, encroachment, theft of the Company’s assets
• Non-compliance with provisions or failure to perform duties properly, resulting in significant economic losses to the
Company; intentional concealment or incorrect report of any transaction; conflicts of interest of employees, including
senior members
• Fabrication and misrepresentation of documents for personal interests
• Disclosure of any trade secret or technical secret of the Company; non-compliance with internal control of the Company;
other corrupt practices which are detrimental to the Company’s financial benefit
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Relevant reports will be accepted and seriously investigated in accordance with relevant policies, and investigation reports will be issued and archived. The Group strictly keeps confidential the information of whistle-blowers, and will seriously deal with the disclosure of the report according to the circumstances. Meanwhile, illegal retaliation is prohibited. If there is illegal discrimination, retaliation or hostilities against the informant, information provider or the person in charge of investigating fraud, or intentional provision of false information to retaliate against or slander others, the Group will deal with it seriously in accordance with the rules and regulations, and acts violating the law will be transferred to the judicial authority for handling according to the law.

In order to strengthen the sense of integrity of our staff, the Group conducted one anti-corruption training during the Reporting Period, which was lectured by the legal affairs department with 17 participants. This training involved the finance department, technical supervision department, personnel department, asset management department, and business development department and many other departments.

E-COMMODITIES HOLDINGS LIMITED Environmental, Social and Governance Report 2020

IMPROVE QUALITY CONTROL

QUALITY ASSURANCE

The Group strictly complies with the Production Safety Law of the People’s Republic of China, the Law of the People’s Republic of China on Road Traffic Safety, the Regulations on the Administration of Railway Safety, the Coal Industry Law of the People’s Republic of China, the Mineral Resources Law of the People’s Republic of China, the Regulations on Coal Safety Supervision (《煤炭安全監察條例》), the Mine Safety Law of the People’s Republic of China, the Advertising Law of the People’s Republic of China, the Regulations on Administration of Advertisement (《廣告管理條例》), the Trademark Law of the People’s Republic of China, the Implementation Rules of the Trademark Law (《商標法實施條例》), the Law of the People’s Republic of China for Anti-unfair Competition (《中華人民共和國反不正當競爭法》), the Law on Intellectual Property Rights of the People’s Republic of China (《中華人民共和國知識產權法》), the Law on Protection of Consumer Interests of the People’s Republic of China (《中華人民共和國消費者權益保護法》), the Product Quality Law of the People’s Republic of China (《中華人民共和國產品質量法》), the Tort Law of the People’s Republic of China, and the Provisions on Prohibition of Infringement of Trade Secrets Issued by the State Administration for Industry and Commerce, the Cybersecurity Law of the People’s Republic of China and other relevant laws and regulations. It has established the concept of “Quality First” and continuously improves the construction of quality management system. During the Reporting Period, the Group had no incidents of violating the above laws and regulations related to product and service on aspects of health and safety, advertising, labeling and privacy matters and remedies, and no products sold or shipped needed to be recalled due to safety and health concerns.

During the Reporting Period, the Group made further strides towards resolving the bottle neck in cross-border logistics transportation between China and Mongolia and enhanced the customs clearance efficiency. Among them, the Group placed over 800 tractor trailers and over 10,000 containers along the long supply chain link from the Mongolian mining pits to the delivery warehouses within China designated by the end-customers and along major logistics routes. The Group digitalized port logistics parks, railway stations, washing and processing centers, opened up the full-process data, enhanced and deepened the cooperation with third parties in integrated online platform “Yee-Link”, further drove the digital transformation of the commodities logistics industry, and not only optimized the logistics process, strengthened the management of goods in transit, enhanced operational efficiency, but also lowered logistics costs.

Environmental, Social and Governance Report 2020 E-COMMODITIES HOLDINGS LIMITED

VII. IMPROVE QUALITY CONTROL

 Quality Management

The Group formulated and implemented the Technical Supervision and Management System for product quality management, and newly issued the “Three Prohibitions” Management System for the Release of Substandard Products (《不合格品出庫「三禁」管理制度》) to further strengthen the management and control of substandard products so as to ensure the provision of high-quality products and services to customers.

On the basic principles of “products not inspected are prohibited from entering” and “products unqualified are prohibited from leaving”, the Group has carried out prosecution and control from the aspects of procurement and storage, production and delivery, indicators and settlement, and automobile transportation quality (details are shown in the figure below) to ensure quality control at source.

Procurement and storage Calculate and monitor the pass rate based on the purchase contract index and the test and inspection data of each port Production and delivery Calculate and monitor the pass rate based on the quality standards issued by the operation dispatcher, and the test and inspection data of each washing base Indicators and settlement Based on the results of the outgoing inspections of each washing base, the settlement will be made according to the range of indicators such as moisture, ash, and sulfur, and deductions and penalties will be imposed on the parts that exceed the range Automobile Based on the outgoing test and inspection indicators, and with on-site transportation quality business delivery and check as the nodes for inspection, deductions and penalties will be imposed on those that exceed the scope of the indicators

48 E-COMMODITIES HOLDINGS LIMITED Environmental, Social and Governance Report 2020

IMPROVE QUALITY CONTROL

The Group implements the “three prohibitions” management of unqualified products to be delivered to further improve quality control and prevent quality accidents:

Products not inspected are prohibited from leaving. Allocation, sales and delivery of products which have not been tested by the laboratory are prohibited.
Prohibit shoveling unqualified products into qualified products for delivery. After unqualified products are identified, on-site personnel or other management personnel are prohibited from shoveling the unqualified products into qualified products for delivery without approval.
Direct loading of contaminated coal or substandard products on the platform is prohibited. All contaminated coal or unqualified products on the platform must be returned to the factory for processing, and on-site personnel or other management personnel are prohibited from arranging direct loading or on-site shoveling and loading without approval.

 Customer Services

The Group provides customers with high-quality customer service. We have adopted a customer feedback mechanism which allows customers to give feedback on relevant products and services in the forms of e-mail and telephone. The Group has established a complaint management mechanism. A special investigation team will be formed after the complaint is received. Surveys are conducted through on-site investigation, evidence collection, interviews with personnel, account checking and auditing and other ways. On the basis of adequate communication and knowledge of the facts, the Group will issue investigation conclusions and take corresponding legal measures. During the Reporting Period, the Group did not receive any complaints about products and services.

 Reasonable Marketing

The Group formulated the Sales Management System, which clearly requires sales personnel to be clean and selfdisciplined, work impartially without seeking personal interests in sales businesses. This is to further regulate advertising and use of label in relation to product sales and marketing services to avoid misleading information.

Environmental, Social and Governance Report 2020 E-COMMODITIES HOLDINGS LIMITED

VII. IMPROVE QUALITY CONTROL

 Intellectual property

The Group attaches great importance to intellectual property protection, and encourages employees to actively invent and create. It has formulated and implemented the Intellectual Property Management System (《知識產權管理制度》), which specifies that the legal affairs department is responsible for related management tasks such as registration applications of intellectual properties, drafting and signing of intellectual property related agreements. If the contract concluded by the Group involves intellectual property rights, relevant provisions of the confidentiality system of the Group must be strictly observed, and provisions in respect of intellectual property protection must be specified in the contract.

 Privacy Protection

The Group has formulated the Confidentiality System (《保密制度》) and Internet Behavior Management Rules (《上網行為管理規則》) to manage confidential information including customer information, which is also explained in the Employee Handbook. Meanwhile, we sign Confidentiality Agreements with employees, and regularly organize confidentiality education and training for them to strengthen their awareness of confidentiality and protect customer information. Based on the nature of the private information, the Group divides such information into different levels of confidentiality, and then determines the scope of the secret-related personnel accordingly as a way to reduce the number of people who have the information, and thus lower the risk of information leakage. For information that demands to be kept confidential for a long time, the Group will sign confidential information and non-competition agreements with secret-related personnel to ensure that the information remains confidential for a long time. For confidential documents, the Group assigns a dedicated person to be responsible for registration management. The responsible custodian of the confidential equipment regularly checks the confidential equipment, and promptly investigates and deals with any problems found to recover the losses. Confidential information may not be transmitted on the Internet or internal LAN without encryption. The supervision department and the legal affairs department shall continuously and closely monitor the relevant behaviors. Once discovered, such cases will be dealt with seriously, and even legal measures will be taken to protect the privacy and business interests of the Group’s customers and partners.

50 E-COMMODITIES HOLDINGS LIMITED Environmental, Social and Governance Report 2020

IMPROVE QUALITY CONTROL

RESPONSIBLE PROCUREMENT

The Group has always insisted on working with suppliers to achieve win-win development. The Group has formulated and implemented the Risk Control System to identify and manage risks in business activities, mainly including but not limited to market risks, operational risks, legal risks, credit risks, environmental risks. In addition, we have formulated and implemented supplier management systems, such as the Management System for Construction Suppliers to evaluate suppliers, so as to continuously improve the procurement management system and process. All suppliers must pass the initial review, assessment, and access procedures of the Group. The Group conducts comprehensive evaluation of supplier quality in terms of data integrity, quality control, production capacity, price, environment, storage and packaging. For suppliers with excellent performance, the Group will prioritize procurement from such suppliers; for suppliers with mediocre performance, the Group will require them to rectify any shortcomings and confirm the results upon rectification; for suppliers with poor performance, the Group will stop purchasing from them and remove it from the list of qualified suppliers.

In order to manage the environmental and social risks in the supply chain, the Group examines the relevant performance of the suppliers during the procurement process, including inspection and evaluation on aspects of whether obtaining the environmental management system certification or not, the 5S conditions on-site (Seiri, Seiton, Seiso, Seiketsu, and Shitsuke), and safety management facilities (such as fire-fighting equipment, safe passages, signs for hazardous area). In addition, in accordance with the requirements of the Administrative Measures for Safety and Environment of New Projects, Reconstruction Projects and Expansion Projects, the Group shall include safety clauses when signing supply contracts with material suppliers. When the supplier provides hazardous chemicals, special equipment, and other hazardous materials or equipment, both parties shall sign a safety and environmental protection agreement to ensure product quality, safety and environmental protection issues in the cooperative operation.

Environmental, Social and Governance Report 2020 E-COMMODITIES HOLDINGS LIMITED 51

VII. IMPROVE QUALITY CONTROL

The Group also considers the impact of procurement activities on the environment in the procurement of office equipment, and actively implements the principle of green procurement. The Group requires all office premises to strictly implement the relevant national procurement catalogs when purchasing energy-using office equipment, and purchase energy-saving products with energy efficiency labels of 1-2 to promote the Group’s energy conservation and emission reduction.

Number of suppliers by geographical region

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96
39
6 7
5
4
3
1
China Australia Mongolia Japan Korea America Russia Others
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52 E-COMMODITIES HOLDINGS LIMITED Environmental, Social and Governance Report 2020

VIII. ACTIVELY GIVE BACK TO THE SOCIETY

The Group pays attention to the needs of the communities where it operates, and invests in communities through various channels as a way to actively assume corporate social responsibilities. The Group offers job opportunities for the places where it operates, and pays taxes in accordance with the law to contribute to community residents and the local economy. During the Reporting Period, the Group indirectly employed more than 700 local laborers in Inner Mongolia, Shanxi, Hebei, Shandong, Liaoning and other regions. The investment in Inner Mongolia directly promoted the development of the local economy, and the Group paid a total of HK$166.7310 million in taxes.

In 2020, when the COVID-19 broke out, in the face of repeated pandemic and lack of prevention and control supplies at ports and all parties, the Group mobilized trade and other resources from various countries and adopted effective pandemic prevention measures to protect the health of employees and customers, and ensure the safety of production and life. We donated cash and various anti-pandemic supplies to the government and society, such as donating medical masks, protective clothing, nucleic acid testing equipment, etc. to the China-Mongolia port where supplies were urgently needed and difficult to purchase, and supported the sale of agricultural products affected by the pandemic. With great love, the Group has undertaken corporate and social responsibilities in the fight against the pandemic.

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The Group donated medical masks to customers, local government departments and the red cross society through its subsidiaries.

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Urad Zhongqi Yiteng Mining Co., Ltd., a subsidiary of the Group, donated nucleic acid testing equipment to the Management Committee of Gants Mod Port (甘其毛都口岸管理委員會).

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E-Commodities Mongolia Intelligent Logistics LLC. (易大宗蒙古智慧物流有限責任公司) donated nucleic acid testing equipment to the Ministry of Health of Mongolia (蒙古國衛生部).

Environmental, Social and Governance Report 2020 E-COMMODITIES HOLDINGS LIMITED 53

IX. APPENDIX: CONTENT INDEX OF ESG REPORTING GUIDE

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Specific page
Content Relevant sections/explanations
number
A. Environmental
A1: General Disclosure Information on: Pollution Control and Emission 22, 24, 28, 30
Emissions Reduction, Green Office
(a) the policies; and
(b) compliance with relevant laws and regulations that
have a significant impact on the issuer relating to
air and greenhouse gas emissions, discharges into
water and land, and generation of hazardous and
non-hazardous waste
A1.1 The types of emissions and respective emissions data Environmental Performance 31-32, 34
A1.2 Greenhouse gas emissions in total (in tonnes) and, where Environmental Performance 33
appropriate, intensity (e.g. per unit of production volume,
per facility)
A1.3 Total hazardous waste produced (in tonnes) and, where Environmental Performance 33
appropriate, intensity (e.g. per unit of production volume,
per facility)
A1.4 Total non-hazardous waste produced (in tonnes) and, Environmental Performance 34
where appropriate, intensity (e.g. per unit of production
volume, per facility)
A1.5 Description of measures to mitigate emissions and results Pollution Control and Emission 22-28, 30
achieved Reduction, Green Office
A1.6 Description of how hazardous and non-hazardous wastes Pollution Control and Emission 24, 28, 30
are handled, reduction initiatives and results achieved Reduction, Green Office
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54 E-COMMODITIES HOLDINGS LIMITED Environmental, Social and Governance Report 2020

CONTENT INDEX OF ESG REPORTING GUIDE

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Specific page
Content Relevant sections/explanations
number
A2: General Disclosure Policies on the efficient use of resources, including Make Good Use of Resources, Green 28, 30
Use of energy, water and other raw materials Office
Resources
A2.1 Direct and/or indirect energy consumption by type (e.g. Environmental Performance 32
electricity, gas or oil) in total (kWh in ’000s) and intensity
(e.g. per unit of production volume, per facility)
A2.2 Water consumption in total and intensity (e.g. per unit of Environmental Performance 32
production volume, per facility)
A2.3 Description of energy use efficiency initiatives and results Make Good Use of Resources, Green 28-30
achieved Office
A2.4 Description of whether there is any issue in sourcing Make Good Use of Resources, Green 28-29
water that is fit for purpose, water efficiency initiatives Office
and results achieved
A2.5 Total packaging material used for finished products (in Not applicable – since our raw Not applicable
tonnes) and, if applicable, with reference to per unit materials and products are bulk
produced commodities transported by
containers, no packaging material
has been used
A3: General Disclosure Policies on minimising the issuer’s significant impact on Pollution Control and Emission 22, 24
The the environment and natural resources Reduction
Environment
A3.1 Description of the significant impacts of activities on the Pollution Control and Emission 22, 24 ,26
and Natural
environment and natural resources and the actions taken Reduction
Resources
to manage them
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Environmental, Social and Governance Report 2020 E-COMMODITIES HOLDINGS LIMITED 55

IX. APPENDIX: CONTENT INDEX OF ESG REPORTING GUIDE

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Specific page
Content Relevant sections/explanations
number
B. Social
B1: General Disclosure Information on: Talent Recruitment, Talent Care 35-36, 40
Employment
(a) the policies; and
(b) compliance with relevant laws and regulations that
have a significant impact on the issuer relating
to compensation and dismissal, recruitment and
promotion, working hours, rest periods, equal
opportunity, diversity, anti-discrimination, and other
benefits and welfare
B1.1 Total workforce by gender, employment type, age group Talent Recruitment 37-38
and geographical region
B1.2 Employee turnover rate by gender, age group and Talent Recruitment 39
geographical region
B2: General Disclosure Information on: Safe Production, Safety Training 13, 19
Health and
Safety (a) the policies; and
(b) compliance with relevant laws and regulations that
have a significant impact on the issuer relating to
providing a safe working environment and protecting
employees from occupational hazards
B2.1 Number and rate of work-related fatalities Safety Performance 21
B2.2 Lost days due to work injury Safety Performance 21
B2.3 Description of occupational health and safety measures Safe Production, Safety Training 13-20
adopted, how they are implemented and monitored
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56 E-COMMODITIES HOLDINGS LIMITED Environmental, Social and Governance Report 2020

CONTENT INDEX OF ESG REPORTING GUIDE

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Specific page
Content Relevant sections/explanations
number
B3: General Disclosure Policies on improving employees’ knowledge and skills Safety Training, Talent Training 19-20, 42-43
Development for discharging duties at work. Description of training
and Training activities
B3.1 The percentage of employees trained by gender and Talent Training 44
employee category (e.g. senior management, middle
management)
B3.2 The average training hours completed per employee by Talent Training 44
gender and employee category
B4: General Disclosure Information on: Talent Recruitment 35-36
Labour
Standards (a) the policies; and
(b) compliance with relevant laws and regulations that
have a significant impact on the issuer relating to
preventing child and forced labour
B4.1 Description of measures to review employment practices Talent Recruitment 36
to avoid child and forced labour
B4.2 Description of steps taken to eliminate such practices Talent Recruitment 36
when discovered
B5: General Disclosure Policies on managing environmental and social risks of Responsible Procurement 51
Supply Chain the supply chain
Management
B5.1 Number of suppliers by geographical region Responsible Procurement 52
B5.2 Description of practices relating to engaging suppliers, Responsible Procurement 51-52
number of suppliers where the practices are being
implemented, how they are implemented and monitored
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Environmental, Social and Governance Report 2020 E-COMMODITIES HOLDINGS LIMITED 57

IX. APPENDIX: CONTENT INDEX OF ESG REPORTING GUIDE

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Specific page
Content Relevant sections/explanations
number
B6: General Disclosure Information on: Quality Assurance 47-50
Product
Responsibility (a) the policies; and
(b) compliance with relevant laws and regulations that
have a significant impact on the issuer relating to
health and safety, advertising, labelling and privacy
matters relating to products and services provided
and methods of redress
B6.1 Percentage of total products sold or shipped subject to Quality Assurance 47
recalls for safety and health reasons
B6.2 Number of products and service related complaints Quality Assurance 49
received and how they are dealt with
B6.3 Description of practices relating to observing and Quality Assurance 50
protecting intellectual property rights
B6.4 Description of quality assurance process and recall Quality Assurance 48-49
procedures
B6.5 Description of consumer data protection and privacy Quality Assurance 50
policies, how they are implemented and monitored
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58 E-COMMODITIES HOLDINGS LIMITED Environmental, Social and Governance Report 2020

CONTENT INDEX OF ESG REPORTING GUIDE

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Specific page
Content Relevant sections/explanations
number
B7: General Disclosure Information on: Integrity Management 45
Anti-
corruption (a) the policies; and
(b) compliance with relevant laws and regulations that
have a significant impact on the issuer relating to
bribery, extortion, fraud and money laundering
B7.1 Number of concluded legal cases regarding corrupt Integrity Management 45
practices brought against the issuer or its employees
during the Reporting Period and the outcomes of the cases
B7.2 Description of preventive measures and whistle-blowing Integrity Management 45-46
procedures, how they are implemented and monitored
B8: General Disclosure Policies on community engagement to understand the Actively Give Back to the Society 53
Community needs of the communities where the issuer operates
Investment and to ensure its activities take into consideration the
communities’ interests
B8.1 Focus areas of contribution (e.g. education and Actively Give Back to the Society 53
environmental concerns, labour needs, health, culture,
sport)
B8.2 Resources contributed (e.g. money or time) to the focus Actively Give Back to the Society 53
area
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Environmental, Social and Governance Report 2020 E-COMMODITIES HOLDINGS LIMITED 59

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AI assistant

E-Commodities Holdings Limited — Environmental & Social Information 2021

50127_rns_2021-05-31_34d54b3f-aa78-47e0-9bc3-ad6d782f3bd2.pdf

I. ABOUT THIS REPORT

REPORTING SCOPE

BASIS OF PREPARATION

APPROVAL AND CONFIRMATION

REPORT DISTRIBUTION CHANNEL

FEEDBACK

II. ABOUT E-COMMODITIES

CORPORATE PROFILE

II. ABOUT E-COMMODITIES

Supply chain trading

Integrated supply chain services

ABOUT E-COMMODITIES

OPERATING RESULTS

II. ABOUT E-COMMODITIES

ASSETS FOOTPRINT

III. SUSTAINABLE DEVELOPMENT

SUSTAINABLE DEVELOPMENT GOVERNANCE STRUCTURE

III. SUSTAINABLE DEVELOPMENT

COMMUNICATION WITH STAKEHOLDERS

MATERIALITY ASSESSMENT

III. SUSTAINABLE DEVELOPMENT

SUSTAINABLE DEVELOPMENT

SOCIAL ASPECT

III. SUSTAINABLE DEVELOPMENT

ENVIRONMENTAL ASPECT

Material issues on environmental aspects

IV. ENSURE SAFE PRODUCTION

SAFE PRODUCTION

IV. ENSURE SAFE PRODUCTION

Safe Production Responsibility Management System

Safe Production Policy and Target Index Management System

Safety Production Inspection and Hidden Danger Investigation and Control System

Production Equipment and Safety Facilities Management System

Accident Emergency Plan and Drill Management System

ENSURE SAFE PRODUCTION

IV. ENSURE SAFE PRODUCTION

PROTECT EMPLOYEES’ HEALTH DURING THE PANDEMIC

ENSURE SAFE PRODUCTION

Case: Urad Zhongqi Haotong Clean Energy Co., Ltd. actively carried out pandemic prevention and control work

IV. ENSURE SAFE PRODUCTION

SAFETY TRAINING

RESOURCES INVESTED IN HEALTH AND SAFE PRODUCTION IN 2020:

IV. ENSURE SAFE PRODUCTION

SAFETY PERFORMANCE

V. PRACTICE ENVIRONMENTAL PROTECTION OPERATIONS

POLLUTION CONTROL AND EMISSION REDUCTION

PRACTICE ENVIRONMENTAL PROTECTION OPERATIONS

V. PRACTICE ENVIRONMENTAL PROTECTION OPERATIONS

Environmentally Friendly

Reducing Cargo Damage

Real-time Positioning

Pendulum Transportation

Multimodal Transportation

V. PRACTICE ENVIRONMENTAL PROTECTION OPERATIONS

Dust reduction at the source

Active dust reduction

Operation to avoid dust

V. PRACTICE ENVIRONMENTAL PROTECTION OPERATIONS

MAKE GOOD USE OF RESOURCES

PRACTICE ENVIRONMENTAL PROTECTION OPERATIONS

Case: Water reuse measures for coal washing

V. PRACTICE ENVIRONMENTAL PROTECTION OPERATIONS

GREEN OFFICE

CLIMATE CHANGE

PRACTICE ENVIRONMENTAL PROTECTION OPERATIONS

ENVIRONMENTAL PERFORMANCE

V. PRACTICE ENVIRONMENTAL PROTECTION OPERATIONS

PRACTICE ENVIRONMENTAL PROTECTION OPERATIONS

V. PRACTICE ENVIRONMENTAL PROTECTION OPERATIONS

VI. CARE AND CULTIVATE TALENTS

TALENT RECRUITMENT

VI. CARE AND CULTIVATE TALENTS

CARE AND CULTIVATE TALENTS

VI. CARE AND CULTIVATE TALENTS

CARE AND CULTIVATE TALENTS

By region

VI. CARE AND CULTIVATE TALENTS

E-Commodities Holdings Limited Environmental & Social Information 2021