Sustainability Report
Hengli Petrochemical Co., Ltd.
Address: 31st Floor, Building B, Victoria Plaza, No.52 Gangxing Road, Renmin Road
Subdistrict, Zhongshan District, Dalian,
Telephone: 0411-39865111
Website: https://www.hengli.com/invest/hlsh
CONTENTS
About the Report 01 Appendix
Message from the Chairman 03
Appendix 1: GRI Standards Index 115
About Hengli Petrochemical 05 Appendix 2: SSE Sustainability Reporting Index 116
Sustainability Management 13 Appendix 3: Key Performance Form 117
Feedback 123
Governance as the Green and Low-Carbon, Value Symbiosis, People-oriented,
Cornerstone, Fostering Safeguarding Our Achieving Excellence Building a Responsible
Long-Term Prosperity Ecological Home with Craftsmanship Future Together
Corporate Governance 21 Environmental Compliance Management 35 Product Quality Management 71 Employee Rights and Benefits 95
Risk Management 27 Controlling Pollutant Discharge 42 Optimizing Customer Service 75 Employee Growth 100
Business Ethics 30 Response to Climate Change 47 Upholding Innovation-driven Development 77 Production Safety 105
Efficient Utilization of Resources 57 Strengthening Information Security 84 Social Welfare 112
Risk Management
Seizing Clean Technology Opportunities 63 Rural Revitalization 114
Sustainable Supply Chain 85
Chemical Safety 87
Sustainability Report 2025
About the Report
This report is the fifth Sustainability (ESG) Report published by Hengli Petrochemical Co., Ltd. (Stock Code: 600346.SH). It aims
to provide stakeholders with a comprehensive disclosure of the Company's core principles, management systems, implemen-
tation measures and progress regarding ESG issues in its business operations.
Definitions
Reporting Scope
This report focuses on Hengli Petrochemical Co., Ltd. (hereinafter referred to as "Hengli Petrochemical" or "the Company), Term Definition Term Definition
including its subsidiaries and branches. Unless otherwise specified, the scope of this report is consistent with that of the Compa-
Hengli Petrochemical Hengli Petrochemical Co., Ltd. Jiangsu Xuanda Jiangsu Xuanda Polymer Materials Co., Ltd.
ny's financial statements for the same period.
Hengli Group Hengli Group Co., Ltd. Deli Chemical Fiber Jiangsu Deli Chemical Fiber Co., Ltd.
Hengli Petrochemical Refining Hengli Petrochemical (Dalian) Refining Co., Ltd. Kanghui New Material Kanghui New Material Technology Co., Ltd.
Reporting Period
Hengli Petrochemical (Dalian) Hengli Petrochemical (Dalian) Co., Ltd. Kanghui Nantong Kanghui Nantong New Material Technology Co., Ltd.
The reporting period is from January 1, 2025, to December 31, 2025. Certain information may include reference to prior years or
Hengli Petrochemical (Huizhou) Hengli Petrochemical (Huizhou) Co., Ltd. Kanghui Dalian New Material Kanghui Dalian New Material Technology Co., Ltd.
forward-looking statements. This report is published on an annual basis, consistent with the Company's financial reporting cycle.
Hengli Chemical Fiber Jiangsu Hengli Chemical Fiber Co., Ltd. Susheng Thermal Power Suzhou Susheng Thermal Power Co., Ltd.
Hengke Advanced Materials Jiangsu Hengke Advanced Materials Co., Ltd.
Preparation Basis
Guidelines No. 14 of Shanghai Stock Exchange for Self-Regulation of Listed Companies—Sustainability Report (Trial)
Confirmation and Approval
Guidance No. 4 of Shanghai Stock Exchange for Self-Regulation of Listed Companies—Preparation of Sustainability Report
The Board of Directors pledges to oversee the content of this report, ensure that it contains no false statements or misleading
Guidelines on Corporate Social Responsibility Reporting for Chinese Enterprises (CASS-ESG 6.0) by the China Enterprise Reform information, and assumes responsibility for its truthfulness, accuracy, and completeness.
and Development Society (CERDS)
Sustainable Development Goals (SDGs) of the United Nations
Report Access
Sustainability Accounting Standards Board (SASB) Standards
This report is published in electronic format and is available through the following official channels:
Sustainability Reporting Standards (GRI Standards) from the Global Reporting
Hengli Petrochemical's official website: https://www.hengli.com/invest/hlsh
Recommendations of the Task Force on Climate-Related Financial Disclosure (TCFD)
Shanghai Stock Exchange official website: https://www.sse.com.cn/
Data Source Contact Information
The data presented in this report comes from the Company's actual operational records, publicly available government data, If you have any comments or suggestions regarding this report, please contact us via the following methods:
annual financial data and relevant internal statistical reports. The financial data in this report is denominated in RMB. In the event
of any inconsistency with the financial statements, the financial statements shall prevail. This report is prepared in both Chinese Address: 31st Floor, Building B, Victoria Plaza, No.52 Gangxing Road, Renmin Road Subdistrict, Zhongshan District, Dalian,
and English. In the event of any discrepancy between the Chinese and English versions, the Chinese version shall prevail. Liaoning Province, China
Telephone: 0411-39865111
Sustainability Report 2025
Message from the Chairman Advancing High-Quality Development through Green and Low-Carbon Development
Seven of our subsidiaries have been recognized as national "Green Factories," and three enterprises within the Hengli (Dalian
Changxing Island) Industrial Park have been consecutively awarded the national "Energy Efficiency Leader" title for the fourth
year. In 2025, Hengli Petrochemical (Huizhou)'s PTA products not only maintained industry-leading energy efficiency but also
Dear Shareholders, Partners, Employees and Friends from all sectors of society who support the development of Hengli Petro- emerged as the sole "Water Efficiency Leader" in the sector. Hengke Advanced Materials, as the exclusive representative in the
chemical: polyester fiber segment, was selected as a key industry "Energy Efficiency Leader" by the Ministry of Industry and Information
Technology for 2025 and selected for the "National Industrial Power Demand-Side Management Typical Cases 2025." Hengli
On behalf of the Board of Directors of Hengli Petrochemical, I would like to extend our sincere gratitude for your continued trust Petrochemical Refining was honored as an Advanced Collective in the inaugural "China Water Conservation Award," standing as
and support, as we release the Hengli Petrochemical Sustainability Report 2025. the sole industrial enterprise in Liaoning Province to receive this distinction. Additionally, Hengli Chemical Fiber was successfully
included in the national "List of Excellence-Level Smart Factory Projects 2025." These achievements not only serve as a strong
In 2025, the global transformation toward green and low-carbon development accelerated, and China's "Carbon Peak and
affirmation of the Company's green development practices but also validate our systematic capabilities and leading advantages
Carbon Neutrality" strategy continued to deepen. In a rapidly evolving industrial landscape and an increasingly complex market
in efficient resource utilization, clean production, and the circular economy.
environment, Hengli Petrochemical has firmly integrated the philosophy of sustainable development into its top-level strategy
and daily operations. Deeply rooted in the real economy and proactively positioning for the future, we are continuously Driving Industrial Upgrading through Innovation
strengthening our competitive advantages along the industrial chain, steadfastly driving green transformation and technological
innovation. These concerted efforts represent significant progress on our path to high-quality development. We invested 1.626 billion yuan in R&D throughout the year and obtained a cumulative total of 2,039 domestic and foreign
patent grants. Significant breakthroughs were achieved in key technological fields: Hengli Chemical Fiber pioneered the
one-step "three-in-one" texturing technology, becoming the sole domestic enterprise capable of mass-producing hollow
textured yarn (Safir) and stretch imitated acetate; Kanghui New Material successfully overcame key technical barriers in polarizer
protective base films, increasing the premium product yield to 90% and accelerating the process of import substitution; Hengli
Petrochemical Refining high-end HDPE grade ACP7740F2 obtained certification from overseas customers, expanding new
application scenarios in high-end injection molding. The biodegradable materials project jointly undertaken by the Company
and Dalian University of Technology was awarded the Second Prize of the Liaoning Provincial Science and Technology Progress
Award, highlighting the fruitful outcomes of industry-academia-research cooperation.
Enhancing ESG Performance through Strengthening Governance
We continue to refine our board governance mechanisms, strengthen strategic deliberations on climate risks, and focus on
long-term value creation. In 2025, our MSCI ESG rating was upgraded from B to BB for the first time, and we were selected as
the only listed company in the petrochemical sector to be included in the "Forbes China 2025 ESG 50" list, reflecting investor
recognition of the Company's execution and transparency in its sustainability strategy.
With favorable winds filling our sails on this long voyage, we set forth anew, shouldering our weighty responsibilities. Looking
ahead to 2026, Hengli Petrochemical will remain steadfast in its founding mission of serving the nation through industry, fulfilling
environmental, social, and governance responsibilities with even higher standards. In partnership with all stakeholders, we will
build a sustainable future of harmonious coexistence between humanity and nature, contributing greater effort to the
high-quality development of China's petrochemical industry!
Fan Hongwei
Chairman
Sustainability Report 2025
About Hengli Petrochemical Business Layout
Headquartered in Dalian, China, the Company operates seven major production bases spanning the country from north to south,
including Suzhou, Dalian Changxing Island, Nantong, Suqian, Yingkou, Huizhou, and the Yangtze River Delta Integrated Demon-
Company Profile
stration Zone, and is committed to becoming a global supplier of new chemical materials across the entire industrial chain.
Hengli Petrochemical has established high-quality, efficient production capacities and supporting utility systems across the
upstream, midstream, and downstream segments of the polyester and new chemical materials industry chain, characterized by
Hengli Petrochemical Co., Ltd. (stock abbreviation: Hengli Petrochemical; stock code: 600346) was established in November large-scale facilities, integrated operations, advanced process technologies, environmentally responsible practices and compre-
transitioned into the petrochemical sector through a major asset restructuring in 2016. In 2018, it completed a critical step in level within the industry.
establishing an integrated full industry chain. In recent years, the Company has advanced refined operations and high-quality
development, establishing an integrated industrial matrix combining oil, coal, and chemicals, and has become a leading private
enterprise in the refining and petrochemical industry.
Main Business 1 Hengli (Yingkou) Industrial Park
The Company's main business covers the production, research and development and sales of products across the full industry
chain, from refining and petrochemicals to aromatics, olefins, basic chemicals, fine chemicals and downstream application 3
materials. Leveraging an integrated upstream platform combining oil, coal, and chemicals, the Company targets essential
consumer markets related to everyday needs, as well as high-growth segments in advanced materials characterized by high 5
technical barriers and value-added potential. The Company continuously strengthens its internal integration advantages, cost
moats, and refined management and control, and continues to build a value-growth listed enterprise of "platform + new materi-
als".
The Company has established a robust midstream and upstream business segment, anchored by processing and coupling
capacities of 20 million tons of crude oil and 6 million tons of raw coal annually. The primary output from oil refining includes an 7
annual production of 5.2 million tons of PX, 2 million tons of pure benzene, 1.8 million tons of fiber-grade ethylene glycol,
(HDPE), 140,000 tons of butadiene, 260,000 tons of PC, 150,000 tons of PS, and 300,000 tons of ABS, among other high-end
chemical products. The coal chemical sector primarily yields an annual production of 800,000 tons of methanol, 580,000 tons of 4 Hengli (Nantong) Industrial Park 2 Hengli (Dalian Changxing
Island) Industrial Park
liquid ammonia, 1 million tons of acetic acid, 300,000 tons of adipic acid, 80,000 tons of polyoxymethylene, 250,000 tons of
high-purity hydrogen, and high-calorific-value methane fuel gas, among other characteristic coal chemical products. Addition-
ally, the Company produces refined oil products such as gasoline, diesel, and aviation kerosene. With 16.6 million tons/year of
operational PTA capacity— now fully commissioned— the Company has emerged as the industry's most technologically
advanced and cost-competitive PTA supplier. The downstream polyester and chemical new material products are rich in variety
and complete in specifications, targeting the mid-to-high-end market demand, covering polyester and chemical new material
products such as civilian polyester filament, industrial polyester filament, BOPET, PBT, PBS/PBAT, etc., which are applied in the
textile, medicine, automotive industry, environmental protection, new energy, electronic and electrical, photovoltaic industry,
Industrial Park 3 Hengli (Suqian) Industrial Park
optical equipment, and other large-scale, differentiated, and high value-added industrial manufacturing and civilian consump-
tion fields.
Sustainability Report 2025
Performance Highlights in 2025
Value Symbiosis, Craftsmanship
Achieves Excellence
Total number of R&D personnel R&D investment Ratio of R&D investment to revenue
Governance as the Cornerstone, Fostering
Long-Term Prosperity
Cumulative number of authorized Number of national high-tech Violations of information security and
patents enterprise privacy protection regulations
Achieved an A rating in the Shanghai Attendance rate of Board Meeting Coverage rate of business ethics
Stock Exchange's information disclo-
training
sure assessment for listed companies
Chemical emergency drills Resolution rate of customer Percentage of major manufacturing
complaint subsidiaries that have obtained ISO
times certification
%
Green and Low-carbon, Safeguarding the
Ecological Home
People-oriented, Building a Responsible
Future Together
Clean technology investment PV power generation Environmental protection investment
investments
Greenhouse gas emission intensity Renewable energy consumption persons million yuan
thousand yuan
sessions
Water consumption intensity thousand yuan hours
times
Sustainability Report 2025
Honors and Achievements in 2025
Innovation Leadership
ESG Leadership
National "5G Factory" National "Excellence-Level Smart Factory Projects"
Forbes China 2025 ESG 50 National "Green Factory" National "Energy Efficiency Leader" in the
polyester industry Kanghui Nantong Hengli Chemical Fiber
Hengli Petrochemical Kanghui New Material Hengke Advanced Materials
Ministry of Industry and Information Technology Ministry of Industry and Information Technology
Ministry of Industry and Information September 2025 September 2025
Forbes China Ministry of Industry and Information
Technology
Technology
September 2025
February 2025 November 2025 "Advanced Smart Factory" of Jiangsu Province
Advanced Collective of the National Industrial
and Information Technology System Hengke Advanced materials,
"Energy Efficiency Champion" and "Water Hengli Chemical Fiber,
List of Potential Cases for the "Green Factory" of Guangdong Province Hengli Chemical Fiber
Efficiency Leader" Deli Chemical Fiber
Enterprise ESG Case Collection Activity
in the petroleum and chemical industry
Ministry of Industry and Information Technology Industry and Information Technology Department of Jiangsu
Hengli Petrochemical (Huizhou) Hengli Petrochemical Hengli Petrochemical (Huizhou)
March 2025 May 2025
China Petroleum and Chemical Ministry of Ecology and Environment Department of Industry and Information
Industry Federation Technology of Guangdong Province
November 2025 July 2025 October 2025
Advanced Collective of "China Water
Conservation Award"
Hengli Petrochemical Refining National "GreenFactory"
Kanghui New Material
?Ministry of Water Resources
December 2025
Advanced Collective of "China Water
Conservation Award"
Hengli Petrochemical Refining
Industry Leadership
China's 500 Most Valuable Brands Ranked 18th among the World's Top National Industrial Power Demand-Side
Hengli Brand Hengli Petrochemical Hengke Advanced Materials
Ministry of Industry and
World Brand Summit Chemical & Engineering News (C&EN)
Information Technology
National "5G Factory"
June 2025 July 2025 November 2025
Kanghui Nantong
Best Practices for the Boards of Directors of AAA-level Quality Credit Enterprise AAA-level Quality Credit Enterprise
Listed Companies and Best Practices for the in Jiangsu Province in Jiangsu Province
Sustainable Development of Listed Companies
Hengli Petrochemical Hengke Advanced Materials Deli Chemical Fiber
Jiangsu Provincial Market Supervision Jiangsu Provincial Market Supervision
China Association for Public Companies
Administration and Development & Reform Administration
December 2025 Commission December 2025
December 2025
May Day Labor Award Certificate National Civilized Unit
of Liaoning Province
Kanghui New Material Hengli Petrochemical Refining
The Spiritual Civilization Development
Liaoning Federation of Trade Union
Steering Commission
November 2025 May 2025
Sustainability Management
·Sustainability System ·Stakeholder Engagement ·Materiality Assessment
Sustainability serves as the cornerstone and vital safeguard for the Company's pursuit of environmental and long-term develop-
ment. The Company consistently prioritizes the end-to-end management of sustainability, continuously refines its governance
framework, actively aligns with the United Nations Sustainable Development Goals (SDGs), conducts thorough assessments of
material sustainability issues, and continually strengthens stakeholder engagement mechanisms. Through systematic and
standardized management, the Company ensures the implementation of its commitment to responsibility, providing a solid
foundation for its long-term development.
Sustainability Report 2025
Sustainability System
Approve ESG strategies, plans, and goals proposed by
董事会
the ESG Task Force
Hengli Petrochemical places great emphasis on ESG governance and has established a ESG governance framework comprising
the decision-making, management, and executive levels. Led by the Board of Directors, the Company formulates long-term Supervise the Company's ESG performance comprehen-
Board of Directors 董事会
sively and assume its accountability
sustainability plans, implements a coordinated management mechanism for ESG-related initiatives, and conducts regular
assessments, reviews, and implementation efforts to ensure that the Company's ESG practices consistently align with its internal-
Decision-Making
ly established sustainability principles and objectives. Review annual ESG reports and other major ESG-relat-
Level
ed matters
Each year, the Company's Strategy and Sustainability Committee holds at least 1 regular meeting to hear management reports
on progress in the ESG domain. Meeting topics include ESG policy trends, key issues (such as corporate ethics, carbon emissions,
waste emissions, clean technology opportunities, and energy management), potential risks and opportunities, progress toward
achieving targets, and information disclosure. During the reporting period, the Strategy and Sustainability Committee convened
meetings to review the Company's ESG management status.
The Company regularly organizes and invites external experts to conduct ESG-related training for the Board of Directors,
Lead and execute
董事会 ESG initiatives
management, and relevant personnel. The training covers the latest ESG policy requirements, industry best practices, and other
issues, thereby advancing the implementation of the Company's ESG strategic planning, policies and processes.
Strategy and Sustain- 董事会
Propose ESG strategies, plans, and goals
ability Committee
ESG Task Force
Management Identify and manage ESG risks and opportunities
Level
(CEO, Secretary of Board of
Directors, and Industrial Park
Monitor ESG performance and goal implementation
Heads)
Steady Operations &
Sound Governance
Energy Conservation & Communicate with stakeholders, identify material ESG
Sustainable Green 董事会ESG training programs
issues, and organize
Development
Organize the preparation of annual ESG reports and
董事会
other ESG disclosures
People Orientation Sustainability Strategy Oversee topic-specific management
& Social Contribu-
ESG Executive Task Force
tion
Safe Operations & Implementation
(Office of Board of Organize the development of specialized ESG work plans
Sustainable Growth Level
Directors, Functional
Department Heads of
Coordinate and implement ESG initiatives
Subsidiaries)
Insightful Innovation &
Digital Intelligence
Monitor and report ESG indicators regularly
Safeguard
Sustainability Report 2025
Stakeholder Engagement Materiality Assessment
The Company actively engages with stakeholders through a range of channels, including standardized information disclosure, Hengli Petrochemical adheres to the latest regulatory guidelines issued by the Shanghai Stock Exchange and advances the
surveys, on-site communication and public welfare activities. By listening to the concerns of all parties and responding efficiently identification and assessment of material sustainability issues by closely aligning with industry trends and the characteristics of
to the interests of various sectors of society, the Company continuously improves the quality and effectiveness of communica- its industry chain. In 2025, the Company identified 21 material issues and solicited feedback from internal and external stake-
tion and interaction through a diverse range of initiatives. It actively fosters open, transparent, and mutually trusting relation- holders through a questionnaire survey. Based on two key dimensions, the significance in terms of economic, social, and
ships based on mutual benefit, thereby promoting coordinated development among all parties and long-term sustainability. environmental impacts, and their financial materiality, the Company prioritized these 21 issues, providing clear guidance for the
focus of issue disclosures in this report and for subsequent sustainability strategy implementation.
Stakeholders Topics of Concern Communication Channels and Methods
Company announcements
Improvement of corporate governance The Process of Materiality Assessment
Compliance information disclosure
Timely information disclosure
Shareholders and Investors Promote Sustainable development
Sustainable development capabilities
Company website disclosures
Performance growth and returns Hengli Petrochemical strictly followed the topic disclosure recommendations outlined in the Shanghai
Annual ESG report release Stock Exchange's Guidelines for Sustainability Reporting, closely aligning them with the Company's
industry characteristics, operational features, and sustainability practices. Through a systematic process
Diversity and anti-discrimination Employee feedback collection and response of identifying, assessing, and screening material issues, the Company ultimately identified 21 sustainabil-
Issue Identification ity issues in a scientifically sound manner.
Upholding the rights and interests of employees Employee welfare distribution
Employees Occupational health and safety Regular health checkups
Broaden career development pathways Emergency response drills
Comprehensive compensation and benefits Improve the talent cultivation system
The Company conducted a survey to evaluate the 21 identified issues. Based on their significance in
Satisfaction surveys terms of economic, social, and environmental impacts, as well as their financial importance to the
Innovation and R&D
Customer complaint channels Company, we assessed how various stakeholders prioritize these issues and developed a preliminary
Customers High-quality products
Issue Assessment issue matrix.
Supplying high-quality service
After-sales support
Industry exchange meetings
Compliant operation Complying with laws and regulations
Government and Pay taxes in accordance with the law Proactive tax payment The Company invited external experts to participate in the review process. Based on a comprehensive
Regulatory Anti-monopoly measures Regular disclosures and in-depth understanding of the Company's actual operations and current development status, the
expert team carefully considered management's analysis and assessment of various sustainability issues.
Agencies Risk management Strengthen internal controls By combining industry practices with professional standards, they conducted joint discussions and
Expert Judgment
Business ethics Government supervision ultimately established a scientifically sound matrix of sustainability issues.
Anti-bribery measures
Uphold business ethics
Anti-monopoly measures
Suppliers and Partners Transparent procurement
Integrity and cooperation
Jointly fulfill social responsibilities Submit the matrix of identified material issues and related materials to the Board of Directors and
Mutual benefit relevant responsible units for review and approval, and disclose them in the annual ESG report.
Review and Approval
Environmental compliance
Social welfare activities
Support public welfare and charity
Communities Provide employment opportunities
Contributing to community development
Strengthen pollutant prevention
Energy conservation and emission reduction
Sustainability Report 2025
Matrix of Material Issues
High Materiality
①Environmental Compliance ⑧Ecological Environment Protection ?Supply Chain Security
?Chemical Safety Management
⑨Safeguarding the Rights and ?Chemical Safety
②Energy Utilization Benefits of Employees
?Safety and Quality of Products and Services ?Contribution to Society
?Occupational Health and Safety
③Response to Climate Change ⑩Employee Training and Promotion
⑦Waste Disposal
③Response to Climate Change ?Rural Revitalization
?Occupational Health and Safety
The significance of impacts on the economy, society and the environment
④Circular Economy
?Technology and Innovation ?Anti-commercial Bribery and
⑤Water Resource Utilization
④Circular Economy
⑥Pollutant Emissions
⑤Water Resource Utilization ?Technology and Innovation Anti-corruption
①Environmental Compliance
⑥Pollutant Emissions ?Safety and Quality of Products ?Anti-unfair Competition
Management
and Services
?Data Security and Customer Privacy Protection ②Energy Utilization ⑦Waste Disposal ?Communications with
?Data Security and Customer Stakeholders
Privacy Protection
⑧Ecological Environment Protection
?Supply Chain Security
?Rural Revitalization
⑩Employee Training and Promotion In 2025, the Company identified 7 dual materiality issues. The results are as follows
?Contribution to Society
⑨Safeguarding the Rights and Benefits of Employees
?Anti-commercial Bribery and Anti-corruption
?Communications with Stakeholders
Environmental Compliance Management Technology and Innovation
?Anti-unfair Competition
Response to Climate Change Safety and Quality of Products and Services
Pollutant Emissions Chemical Safety
Waste Disposal
The importance to the Company's finance High Materiality
Governance as the Cornerstone,
Fostering Long-Term Prosperity
·Corporate Governance ·Business Ethics
·Risk Management
SDGs
Hengli Petrochemical adheres to relevant laws and regulations, including the Companies Law of the People's Republic of China,
the Securities Law of the People's Republic of China, and the Rules Governing the Listing of Stocks on the Shanghai Stock
Exchange. The Company strictly follows the Articles of Association of Hengli Petrochemical Co., Ltd. and various corporate gover-
nance and management systems, emphasizes the leading role of the Communist Party of China (CPC), establishes and improves
its internal control system, strengthens risk prevention and control framework, continuously enhances work conduct, and
commits to ensuring the Company's sound operations.
Sustainability Report 2025
Corporate Governance In 2025, in response to the evolving market and regulatory requirements, the Company introduced and revised a total of 28
governance policies in a systematic manner, strengthening policy coherence and enhancing the effectiveness of its corporate
governance framework.
Hengli Petrochemical continuously consolidates its governance foundation, optimizes its governance structure, and enhances
governance efficacy. The Company strengthens compliant operations and risk control, fortifies information security defenses, Key Performance
and improves information disclosure quality to drive standardized corporate operations. Actively practicing the sustainable
development philosophy, the Company embeds sustainable development elements into core business processes and risk
management by optimizing decision-making mechanisms and reinforcing the Board of Directors' strategic leadership function.
It consistently addresses the expectations and demands of stakeholders, continuously strengthens communication and cooper-
ation with value chain partners and all sectors of society, and jointly advances the realization of sustainable development goals. During the reporting period, the Company held5 shareholders' general meetings to review 22 proposals; the
Board of Directors convened 9 times to review 46 proposals, with a 100% attendance rate among
Governance Framework directors; and a total of 15 specialized committee meetings were held, including 2 meetings of the Strategy
The Company has established a well-structured and robust governance structure comprising the shareholders' general meeting, and Sustainability Committee, 6 meetings of the Audit Committee, 3 meetings of the Remuneration and
the board of directors, and the management. It has formulated regulations including the Rules of Procedure for the Shareholders'
General Meeting and the Rules of Procedure for the Board of Directors, strictly delineating the responsibility boundaries of each Assessment Committee, and 4 meetings of the Nomination Committee.
governance body. This has created an operating mechanism featuring distinct rights and responsibilities, separate and defined
functions, mutual checks and balances, and highly coordinated efficiency among the organ of authority, the decision-making
and supervisory body, and the management.
Governance Framework
Board Diversity
The Company actively advances the professionalization and diversity of the Board of Directors. In the process of director
selection, the Company comprehensively considers multidimensional factors, including gender, age, educational background
and professional expertise, continuously optimizing the composition of the Board to ensure an a scientific and balanced
structure. Board members possess diverse and multifaceted professional expertise and practical experience. They have deep
Shareholders' Strategy and Sustainability Committee
General Meeting expertise in the petrochemical and chemical fiber industries, with extensive experience in industrial management, while also
covering key areas such as financial management, risk management, legal and sustainability. This breadth of expertise supports
a well-rounded perspective in governance and contributes to enhanced decision-making quality and effectiveness.
Audit Committee
Board of Directors
Nomination Committee
Remuneration and Assessment Committee
Management
Note: For detailed information on the corporate governance structure of Hengli Petrochemical, please refer to the
Hengli Petrochemical Annual Report 2025.
Sustainability Report 2025
Remuneration and Strategy and Whether an
Professional Audit Nomination
Name Position
experience Committee
Assessment
Committee
Committee
Sustainability
Committee
independent
director
Board Independence
To further enhance the independence of the Board of Directors and to ensure that independent directors play a full role in
Enterprise informed decision-making, risk management, oversight and effective checks and balances, the Company has established and
management Chairman of the strictly implemented the Independent Director Work System, providing a robust institutional framework to ensure that indepen-
Fan Hongwei Chairman / / / No
Chemical committee dent directors perform their duties independently and diligently. Regarding the management of independent directors' perfor-
industry mance, the Company complies with regulatory requirements by requiring an annual self-assessment of independence, supple-
mented by a dedicated evaluation issued by the Board, in order to continually affirm their independence. Through the Board's
specialized committees, independent directors actively participate in the prior review of significant matters, the oversight of
Enterprise related-party transactions, and discussions on the annual audit planning. They also issue annual work reports and review
Director, General management Committee opinions as required, ensuring the effective discharge of their roles in decision-making, oversight and professional advice.
Li Xiaoming / / / No
Manager Chemical industry member
ESG
Key Performance
Director, Deputy Enterprise
General Manager, management Committee
Li Feng / / / No
Company Chemical industry member
Secretary ESG
Enterprise
management
During the reporting period, the Company's Board of Directors consisted of 8 directors, including 3 indepen-
Director, Deputy
Committee
Liu Dunlei / / / No
General Manager Chemical member dent directors, representing
accounted for 66.66% of the Nomination Committee; 66.66% of the Audit Committee; and
industry
Enterprise
management Committee
Gong Tao Director / / / No
Chemical member of the Board.
industry
Legal industry Committee Chairman of the
Liu Jun Independent Director / / Yes
Risk management member committee
Independent Chairman of Committee Committee
Xue Wenliang Chemical industry / Yes
Director the committee member member
Risk Management Expert
Financial Chairman The Company has appointed risk management experts with extensive professional experience and industry expertise to the
Independent management Committee
Wu Yongdong of the / / Yes Board, who lead the oversight of the development and operation of the Company's enterprise risk management system and
Director member
Risk management committee end-to-end mechanisms covering risk identification, risk monitoring, risk management, and internal control processes. By fully
leveraging their core role in professional oversight and risk prevention, experts provide a robust foundation for the Company's
long-term development.
Sustainability Report 2025
Remuneration Management Information Transparency
The Board of Directors has established a Remuneration and Assessment Committee, constructing a scientific and efficient incen- The Company has established the Information Disclosure Management System and the Accountability System for Material Errors
tive and constraint mechanism for the remuneration of directors and senior management. During the reporting period, the in Information Disclosure of Annual Report to standardize the Company's information disclosure practices. This ensures that
Company refined regulations including the Detailed Rules for the Implementation of the Remuneration and Assessment Commit- information disclosed is truthful, accurate, complete, timely and fair, and facilitates effective communication between the
tee, clarifying the remuneration structure, evaluation criteria, and performance clawback and penalty policies for directors and Company and investors, regulatory authorities and other market participants. The Company has also put in place an oversight
senior management, with the aim of further standardizing the remuneration framework and decision-making procedures. mechanism for information disclosure. The Chairman serves as the primary person responsible for implementation of the
information disclosure management system, while the Company Secretary is the principal person responsible for information
At the beginning of the year, the Company established sustainability-related objectives and set performance indicators across
disclosure, organizing and coordinating related matters to ensure compliance with applicable requirements.
key areas, including carbon emissions, water resources management, quality management and business ethics. It has a direct
link between ESG performance and the remuneration of directors and senior management. Assessments are conducted in strict
accordance with the Company's remuneration regulations, and remuneration packages are determined based on the assess-
Key Performance
ment result.
In 2025, the remuneration for the Company's senior management has been reviewed and approved by the Board of Directors,
with details as follows:
Pre-tax fixed Pre-tax variable Total pre-tax remunera-
During the reporting period, the Company published 4 periodic reports and 81 temporary reports. The
Name Position remuneration remuneration tion Company did not incur any breaches of information disclosure requirements. It received an ‘A’ rating in the
(ten-thousand-yuan) (ten-thousand-yuan) (ten-thousand-yuan)
information disclosure assessment for listed companies conducted by the Shanghai Stock Exchange.
Li Xiaoming Director, General Manager 94.18 31.39 125.57
Director, Deputy General Manager,
Li Feng Company Secretary 106.01 26.50 132.51
Liu Dunlei Director, Deputy General Manager 98.36 32.79 131.14
Investor Relations Management
Liu Xuefen Deputy General Manager, Finance Director 126.13 31.53 157.66
The Company places a strong emphasis on investor relations management. It has established the Investor Relations Management
System and adheres to the principles of compliance, equality, proactivity, and integrity to develop a standardized and efficient
Liu Qianhan Deputy General Manager 89.78 26.82 116.60 investor relations management framework. The Company Secretary is responsible for organizing and coordinating investor
relations management activities, while the Board Office (Securities Department) serves as the functional department for the
day-to-day implementation of investor relations management. In terms of communication channels, the Company maintains
Zhang Wenyu Deputy General Manager 55.30 16.52 71.82 timely, candid and effective communication with investors through regular channels such as the official website, investor hotline,
email, and SSE E-interaction platform, as well as through shareholders' general meetings, investor briefings, roadshows and
investor visits. The Company proactively embraces investor oversight, maintains an effective mechanism for responding to
Huang Xudong Deputy General Manager 89.16 26.63 115.79 investor enquiries, safeguards the legitimate rights and interests of investors, and is committed to fostering long-term, stable
and mutually beneficial investor relationships.
Note: The variable remuneration of senior management is directly linked to sustainability performance, with assess-
ment criteria covering multiple dimensions including carbon emissions management, water resources management,
Best Practice Case for the Best Practice Case for Board Best Practice Case for Investor
quality management and business ethics. Assessments are based on the achievement of specific performance targets Board of Directors of Listed Office of Listed Companies in Relations Management in Listed
Companies in 2025 2025 Companies
set at the beginning of the year. During the reporting period, the Company's senior management substantially met the
targets set at the beginning of the year. China Association for Public China Association for Public China Association for Public
Companies (CAPCO) Companies (CAPCO) Companies (CAPCO)
Sustainability Report 2025
Risk Management
Internal Auditing Process
The Company adheres to compliance requirements and risk thresholds, continues to refine its risk management framework, and
Annual Planning
comprehensively strengthens its risk management capabilities, ensuring that business development is effectively aligned with
prevention and control capabilities. The Board of Directors serves as the leadership and decision-making body for risk manage-
At the beginning of each year, the Audit Department is responsible for developing the annual planning
ment, responsible for overseeing the development of the Company's risk management and internal control systems and
of internal auditing and submitting it to the Chairman for review. The scope of internal auditing covers
monitoring the effectiveness of their implementation.
tal protection and business ethics across all industrial parks, ensuring that each subsidiary of Company
is subject to at least one internal audit annually.
As the first line of defense, each business department is directly responsible for risk management, identifying Mid-Year Implementation and Reporting
First
and assessing key risks and challenges within their operations, and subsequently optimizing operational
Line
standards, process guidelines and management policies.
The Audit Department conducts audits of each industrial park in accordance with the annual planning,
promptly issues audit reports based on the findings, and provides targeted recommendations for
management improvements. The planning may be timely adjusted as needed based on actual circum-
Functional departments such as the Legal and Compliance Department serve as the second line of defense, stances. For key projects in Company's day-to-day operations, as well as in the event of any reported
responsible for coordinating, guidance, oversight and support of risk management activities. In particular, the issues, the Audit Department organizes special audits and continuously monitors the implementation of
Second
Company's ESG Working Group identifies and issues early warnings annually regarding risks associated with corrective actions.
Line
financially material issues such as climate change, environmental compliance management and pollutant
Year-End Feedback and Review
emissions, and formulates corresponding mitigation measures.
The Audit Department continuously monitors the progress of corrective actions implemented by
audited entities and compiles the annual audit findings at the end of each year for submission to the
Third As the third line of defense, the Audit Department conducts regular audits and is responsible for monitoring
Chairman. The auditing results will be incorporated into the annual performance assessment of each
Line and evaluating the effectiveness of the risk management and internal control systems.
subsidiary.
Internal Control and Auditing Key Performance
The Company has established the Internal Control Management System and the Regulations on Internal Audit Work, among other
rules, to standardize and strengthen its internal control efforts. The Audit Department, under the Audit Committee of the Board, During the reporting period, the Audit Department completed audit assignments covering all operating sites and
regularly identifies risks related to business ethics and formulates targeted mitigation measures. Through internal audits and
special inspections, the Company focuses on business ethics risks, such as anti-fraud and anti-corruption, to conduct business business segments of the Company and all its subsidiaries, with a 100% rectification rate for identified issues.
ethics audits, assess and hold accountable the business ethics work of each industrial park, and regularly report on the progress
of business ethics management to the Strategy and Sustainability Committee and the Audit Committee. The Company's audit
activities are structured into three stages: Annual Planning, Mid-Year Implementation and Reporting, Year-End Feedback and
Review, thereby ensuring comprehensive coverage of business ethics audits for directors, senior management, and all employ-
ees.
Sustainability Report 2025
Related-Party Transaction Business Ethics
The Company has established the Related-Party Transaction Management System and incorporated relevant provisions on
related-party transactions into the Articles of Association of Hengli Petrochemical Co., Ltd. Strict control requirements have been
imposed on high-risk related-party transactions, including financial assistance, guarantees, and the occupation of funds, to The Company upholds high standards of business ethics and industry integrity, fostering a culture of honesty and probity. The
eliminate the risk of preferential treatment in related-party transactions and to effectively safeguard the legitimate rights and Company treats commercial bribery, corruption, and unfair competition as strictly prohibited and adopts a zero-tolerance policy.
interests of the Company and non-related shareholders. During the reporting period, the directors, senior management, Through establishing robust systems and strengthening oversight, the Company rigorously combats violations of rules and
controlling shareholders and actual controllers (the "key minority) did not engage in related-party transactions that harmed the discipline to promote the culture of probity. This approach not only ensures its own compliant operations but also helps maintain
interests of the Company or its shareholders. a fair and orderly market environment, demonstrating its corporate responsibility.
Note: For details on related parties and related-party transactions, please refer to the Hengli Petrochemical Annual Report 2025
Anti-commercial Bribery and Anti-Corruption
Tax Compliance Integrity Management System
The Company strictly complies with national tax laws and regulations, including the Enterprise Income Tax Law of the People's The Company places great emphasis on establishing and refining systematic framework for business ethics management and
Republic of China and the Tax Collection and Administration Law of the People's Republic of China, and consistently adheres to end-to-end oversight mechanisms. It has formulated relevant policies, including Business Ethics Management, and has estab-
the principle of lawful tax compliance. In light of the Company's actual business operations and development, it has formulated lished a multi-tiered, comprehensive integrity management system. The Audit Committee serves as the Company's highest
the Financial Control System to standardize the end-to-end tax management processes. During the reporting period, the governing body for matters related to business ethics, including anti-corruption and anti-bribery, and oversees and periodically
Company did not involved in any material tax-related litigation or arbitration. reviews such matters. The Strategy and Sustainability Committee is responsible for overseeing the implementation of ESG
policies and strategies. The Company explicitly extends its compliance requirements to all employees and external partners. It
To further enhance the professionalism and precision of tax management, the Company and its subsidiaries have engaged prohibits any conduct that exploits authority or business relationships to seek improper benefits or harm legitimate rights and
external expertise by appointing experienced tax advisors to provide ongoing advisory support. Concurrently, a long-term interests of the Company. Through robust policies and measures, the Company maintains a strong framework to fortify its
mechanism for self-inspection of tax risks has been established to proactively identify and mitigate potential risks, ensuring that integrity in its operations.
tax-related operations are conducted in a compliance, sound, and orderly manner.
Key Performance Whistleblowing Channels and Whistleblower Protection
The Company has established channels for whistleblowing corruption and has clearly stipulated the protection of whistleblowers
During the reporting period, the Company paid a total of and the accountability of those who disclose their identities in its Business Ethics Management guidelines.
Hotline: Whistleblowing email:
Whistleblowing Whistleblowing Address:
Channels
Subdistrict, Zhongshan District, Dalian, Liaoning Province, China
Sustainability Report 2025
Whistleblowing Process Business Ethics Training
The Company places great emphasis on fostering a culture of business ethics and requires directors, senior management, and
Whistleblow- Whistleblow- Preliminary employees to complete annual internal business ethics training, as well as various external business ethics-related training in
ing occurrence ing receipt assessment accordance with regulatory requirements. During the reporting period, the Company has provided integrity training for all
employees (including interns, temporary employees, and part-time employees), contractors, suppliers, and other relevant
parties. Through diversified communication initiatives and systematic learning, the Company has continuously strengthened the
Reported matters The Audit After receiving a whistleblowing report, the Audit Department integrity and self-discipline awareness of all employees. The coverage rate of business ethics training stood at 100%.
are submitted by Department classifies and handles each case based on the scope of
whistleblowers promptly responsibility, the nature of the reported matter, the severity of
through the receives and the violation, and whether the matter meets the verification
Key Performance
designed registers conditions. Following preliminary verification, a preliminary
channels reported matters handling opinion is formulated
Proportion of directors Proportion of management Proportion of employees Cases of corruption or
participating in business participating in business participating in business bribery litigation
Report In-depth In-depth ethics training ethics training ethics training
formation investigation investigation
Upon completion of the The Audit Department has authorized to require The Audit Department conducts in-depth
investigation, the Audit the departments and personnel involved in the investigations through site visits, review of
Department compiles a investigation to provide explanations and materials from the investigated units or
Case Integrity Education Activity
written report with clarifications on matters. Furthermore, external departments, whistleblowers and other
recommendations and audit firms or other professional institutions and relevant documentation
submits it to the Chairman functional departments may be engaged to assist To further effectively enhance the integrity and self-discipline awareness of the management, on August 6, 2025,
and relevant management in the investigation as needed Hengli (Nantong) Industrial Park organized relevant management and key position holders to participate in an
integrity education activity at the Nantong Integrity Education Center.
Note: For more details, please refer to Business Ethics Management
Measures for Integrity Management
For more information about the event, please refer to "Strengthening the Foundation of Integrity to Support High-quality
Development"
Integrity Undertakings:The percentage of personnel in key positions and critical processes who have signed the
Integrity in Employment Management Commitment Agreement with the Company stood at 100%.
Anti-unfair Competition
Stakeholder Management:In contracts signed with or bid proposals submitted by stakeholders conducting business The Company consistently adheres to the principle of operating in full compliance with laws and regulations, including the
with the Company (including suppliers, service providers, contractors and clients), it is explicitly stated that the Anti-Money Laundering Law of the People's Republic of China, the Anti-Unfair Competition Law of the People's Republic of China,
contracting party or bidder must comply with the Company's integrity-related policies. The execution rate of the and the Anti-Monopoly Law of the People's Republic of China, and actively upholds a fair and orderly market environment and
Anti-commercial Bribery Agreement stood at 100%. promotes healthy competition. The Company has deeply embedded compliance principles throughout every stage of its
business operations and has adopted a zero-tolerance policy toward illegal and non-compliant activities, including unfair
Integrity Assessment: All departments of the Company have strengthened the evaluation and assessment of competition, monopolistic practices, and money laundering, while implementing strict preventive measures and robust controls.
personnel in key positions. By continuously strengthening compliance management and risk identification, the Company ensures that its production and
business operations are conducted in a lawful, standardized, and orderly manner, thereby establishing a robust compliance
foundation for its steadily development.
Green and Low-Carbon,
Safeguarding Our Ecological Home
·Environmental Compliance Management ·Efficient Utilization of Resources
·Controlling Pollutant Discharge ·Seizing Clean Technology Opportunities
·Response to Climate Change
SDGs
Guided by the philosophy of green development, the Company has deeply embedded this philosophy into its corporate core
identity and views environmental protection as the underlying principle of its growth. Building upon environmental compliance,
the Company actively explores new frontiers in low-carbon transition, proactively tackles climate change, steadily advances
energy conservation, carbon reduction, and clean production, and vigorously develops the circular economy to enhance
resource utilization efficiency.
Sustainability Report 2025
Environmental Compliance Management Key Performance
The Company abides by the laws and regulations including the Environmental Protection Law of the People's Republic of China,
In 2025, the Company invested 838 million yuan in environmental protection.
the Law of the People's Republic of China on the Prevention and Control of Atmospheric Pollution, the Law of the People's Republic During the reporting period, the Company did not experience any environmental accidents or violations of environ-
of China on the Prevention and Control of Water Pollution, the Law of the People's Republic of China on the Prevention and Control
of Environment Pollution Caused by Solid Wastes, and the Law of the People's Republic of China on the Prevention and Control of mental laws and regulations.
Soil Pollution, as well as industry standards such as the Emission Standard of Pollutants for Petroleum Chemistry Industry and the
Emission Standard of Pollutants for Synthetic Resin Industry, establishing and continuously improving its environmental compli-
ance management system.
The Company continues to promote its environmental management system certification process. Subsidiaries that have
Environmental governance system obtained ISO 14001 certification undergo one or two environmental compliance audits conducted by professional third-party
institutions annually to ensure the effective operation of their environmental management systems.
The Company has formulated comprehensive environmental compliance management regulations, including the Environmental
Protection Management Regulations, the Environmental Protection Management Assessment Regulations, and the Environmental
Monitoring Management Regulations. These regulations endeavor to standardize key environmental work, such as pollution
prevention and control, environmental monitoring and supervision, emergency management, training and promotion, and Key Performance
implement whole-process, standardized measures to ensure environmental compliance.
The Company has established an organizational structure for environmental compliance management and pollutant discharge
management. The Strategy and Sustainability Committee is entrusted with the responsibility of serving as the leading authority
By the end of the reporting period, 100% of the Company's major manufacturing subsidiaries had obtained
for environmental management. The principals of each industrial park are the primary persons responsible for environmental ISO 14001 environmental management system certification.
protection, taking full charge of assuming overall responsibility for environmental protection work within their respective units.
Additionally, dedicated environmental management departments have been established to define the division of environmental
protection responsibilities at all levels, ensuring the effective implementation of environmental protection-related systems and
strategic policies.
ISO 14001 Environmental Management System Certification
The Company is committed to enhancing its environmental management accountability system by incorporating resource
consumption metrics, including water, electricity, and steam, and compliance discharge metrics such as wastewater and waste
gas emissions into its performance assessment framework. Data on these indicators is regularly collected, calculated and
analyzed across all industrial parks, and factored into the annual performance appraisal.
Organizational Structure and Responsibilities for Environmental Compliance Management
Safety and Responsible for formulating and monitoring the Company's environmental protection policies, emission indicators,
Environmental and work plans; coordinating environmental impact assessments, the treatment of wastewater, waste gas and
Protection solid waste (the "three wastes"), Cleaner Production, and the operation and maintenance of environmental protec-
Department tion facilities; and undertaking emergency response to pollution incidents and the resolution of related disputes.
Responsible for conducting environmental monitoring, compiling and summarizing data, and submitting reports
Inspection Center in a timely manner; undertaking emergency monitoring during sudden environmental incidents and heavy
pollution weather; and assisting in the investigation and handling of sudden environmental incidents.
Responsible for communicating and implementing environmental protection policies, and executing environmen-
All Departments
tal work.
All Workshops Responsible for implementing cleaner production practices in the workshop.
Hengli Petrochemical (Dalian) Hengli Petrochemical Refining Hengli Petrochemical (Huizhou)
Sustainability Report 2025
Environmental Management Strategies Environmental Protection Equipment Inspection: Establish operational management
ledgers for environmental protection facilities; conduct regular inspections, condition
monitoring, and performance verification of all types of environmental protection
The Company has formulated an environmental protection policy to define overarching objectives and strategies. Focusing on facilities to ensure stable operation.
the core areas of environmental impact prevention and risk management, it has systematically allocated specific targets and risk
control requirements to each functional department. By formulating detailed, actionable, and measurable environmental work Hazard Screening and Environmental Emergency Response: Conduct regular hazard
plans, it has established a comprehensive closed-loop system encompassing "goal setting – target breakdown – plan imple- screening, prepare hazard screening reports, and implement timely corrective actions;
mentation – assessment and audit – optimization and improvement – consolidation of results". This ensures that these environ- establish a dual-prevention mechanism for environmental risks.
mental objectives are effectively communicated at all levels, responsibilities are assigned to specific individuals, and actions are Formulation and
Environmental Training and Emergency Capability Building: Conduct professional
successfully implemented. Implementation of
environmental training, thematic promotional activities, dissemination of environmental
Response Strategies
The Company and its subsidiaries have established a dual-oversight mechanism comprising routine assessments and external laws and regulations, and emergency drills for environmental emergencies.
audits. Firstly, they conduct periodic and comprehensive assessments of the implementation status of environmental protection
Environmental Information System: Deploy IoT devices and platforms to enable informa-
efforts and the effectiveness of risk management across all departments and industrial parks, thereby strengthening process
tion-based management of pollutants;
control. Secondly, external experts are invited to conduct professional annual audits of the Company's environmental protection
performance, environmental impact management, and risk prevention measures. This enables the precise identification of
operational shortcomings, the mapping of potential risks, and the determination of areas for optimization.
Performance Evaluation and Environmental Audits: Clearly define responsible parties, link
Impact, Risk and Opportunity Management environmental performance to individual performance evaluations, and engage
third-party organizations to conduct annual audits of environmental management.
Self-Monitoring of Environmental Conditions: Develop an Annual Self-Monitoring Plan
Management Process and commission third-party monitoring agencies to conduct routine monitoring, opera-
tional maintenance, and troubleshooting of anomalies.
Monitoring and
Supervision Disclosure of Environmental Information: Disclose environmental information to the
The Company has consistently adhered to the environmental policy of "green and low-carbon, clean production, and continuous
public.
improvement". We systematically identify and assess environmental aspects, and actively carry out key initiatives such as
environmental hazard screening, building emergency response capabilities for environmental emergencies, and providing
environmental education and training for all employees. These efforts aim to enhance our environmental impact management
capabilities, ensuring risks are kept under control and opportunities are effectively leveraged.
Conduct a review and assessment of environmental management work, and optimize
control measures and management processes in response to identified issues.
Review and Continuous
Identification of Significant Aspects:Identify environmental aspects of each department and Improvement
workshop, compile an inventory of environmental aspects, and assess the potential
impacts, risks, and opportunities they may bring.
Recognition
Key Performance
Analyze and evaluate the scope, frequency, and magnitude of specific environmental
impacts, risks, and opportunities on environmental receptors (e.g., water bodies, air, soil,
ecosystems, energy resources, and surrounding communities), and score and rank them
In 2025, we achieved 100% availability for environmental protection facilities and a 100% compliance rate
Analysis and Assessment by significance. for pollutant monitoring.
Sustainability Report 2025
Key Performance
Case Construction of Risk Management and Dual Prevention Mechanism
In 2025, the Hengli (Dalian Changxing Island) Industrial Park conducted a training session themed "Risk Manage-
During the reporting period, the Company achieved 100% coverage of its operational sites for environmental
ment and the Construction of the Dual Preventive Mechanism." The training provided a comprehensive interpre- audits, with a 100% rectification completion rate for identified issues.
tation of the dual preventive mechanism for addressing environmental risks, thoroughly deconstructing the key
considerations across its six-stage process: screening risk points, identifying risk sources, assessing risks, formu-
lating risk control measures, determining the scope of hidden hazard investigation and compiling investigation
checklists, as well as implementing hidden hazard investigation and rectifying identified hazards. These efforts
effectively heightened the environmental compliance risk awareness of personnel in environmental-related
Environmental Impact Assessment
positions across all workshops.
Hengli Petrochemical and its industrial parks adhere to the requirements of laws and regulations such as the Environmental
Impact Assessment Law of the People's Republic of China and the Regulation on the Administration of Construction Project
Environmental Protection, conducting end-to-end environmental impact assessments for all new, reconstructed, and expanded
projects. At every stage—from project approval and design to construction and operation—the Company conducts scientific
assessments to identify potential environmental risks and formulates and implements targeted mitigation measures. Upon
project completion, the Company enforces the "Three Simultaneous" (simultaneous design, construction, and operation) system
acceptance system for environmental protection facilities to ensure that environmental impacts remain controlled and opera-
tions are fully compliant.
Key Performance
In 2025, the implementation rate of the environmental protection "Three Simultaneous" requirement for construc-
tion projects reached 100%.
Environmental Monitoring and Auditing Biodiversity Protection
Hengli Petrochemical places great importance on ecosystem conservation. All construction projects undergo environmental
The Company adheres to management requirements regarding pollutant discharge and has formulated an environmental impact assessments in accordance with regulations to minimize adverse effects on wildlife, soil biota, groundwater, and other
monitoring plan. In 2025, each industrial park under the Company developed an Annual Self-Monitoring Plan based on its environmental elements. The Company actively participates in ecological restoration initiatives, such as wetland conservation and
operational status and conducted self-monitoring in accordance with regulatory requirements. The Company's environmental vegetation restoration, taking concrete actions to safeguard biodiversity. In practice, Hengli Petrochemical (Huizhou) has formu-
monitoring plans and risk management measures contain no material deficiencies. lated and implemented the Biodiversity Conservation Management Procedures and organized employees to sign biodiversity
conservation pledges to strengthen everyone's sense of responsibility. Hengli Petrochemical (Huizhou) has also established a
For key pollution sources, we have installed automatic online monitoring systems to enable real-time data collection and
dedicated educational hub for biodiversity conservation and conducts routine themed promotional and science outreach
connect to government regulatory platforms. We regularly report pollution source monitoring data and submit pollution
activities, actively embedding the philosophy of biodiversity conservation into daily operations and corporate culture.
discharge permit execution reports, proactively disclose environmental information to the public, and voluntarily embrace
oversight from government regulatory authorities, the public, and stakeholders, thereby fulfilling our corporate environmental
responsibilities.
The Company conducts regular environmental audits of all operational sites to ensure full compliance with environmental laws
and regulations and to continuously improve environmental management performance. During the reporting period, we
organized environmental audits across all operational sites. Working alongside professional auditors, we focused on key areas
such as environmental regulatory compliance, pollutant emission control, and resource utilization efficiency. For all issues identi-
fied during the audits, the Company has formulated and implemented corrective measures.
Hengli Petrochemical (Huizhou) - “Clean Up the Shores, Protect the Blue Seas”
Biodiversity Exhibition Wall National Beach Cleanup Campaign
Sustainability Report 2025
Controlling Pollutant Discharge
Case Coastal Ecological Restoration Action
On March 13, 2025 (the 47th Chinese Tree-Planting Day), to advance the ecological beautification of Daya Bay
and improve the marine ecological environment, young volunteers from the Hengli (Huizhou) Industrial Park
carried out a coastal ecological restoration initiative by planting mangrove saplings. Under professional The Company adheres to regulations governing the compliant discharge of pollutants. By continuously strengthening source
guidance, the volunteers learned key planting techniques, worked together in an organized manner, and built a control, process management, and end-of-pipe treatment, we minimize the impact of our production and operations on the
green barrier along the intertidal zone. surrounding ecological environment, regional air quality, and the lives of local residents.
Pollutant Management System
Each of Hengli Petrochemicals' industrial parks has established specialized management policies for key environmental protec-
tion tasks such as pollutant emissions and waste disposal, and has set up a organizational structure led by the EHS Department
with coordinated participation from multiple departments. During the reporting period, the Company did not incur any major
administrative penalties or criminal liabilities for pollutant discharge, nor did it receive any major complaints from local commu-
nity residents or other groups due to environmental pollution issues.
Organizational Structure for Pollutant Discharge Management
Indicators and Targets Responsible for organizing the development and revision of relevant policies and procedures and overseeing their
implementation; supervising the monitoring of pollutant emissions from various workshops and environmental
EHS Department quality within the plant premises; coordinating with third-party monitoring agencies; developing and issuing annual
Hengli Petrochemicals key environmental indicators, targets and achievement status for 2025 are as follows: monitoring plans and ensuring their implementation; and managing the reporting of environmental monitoring
results, data collection, aggregation, and analysis, as well as the archiving of records.
Environmental Management Objectives Performance
Environmental Responsible for monitoring equipment operation and maintenance, as well as the implementation of routine and
Monitoring emergency monitoring; coordinating data management, third-party collaboration, and record archiving; and
Station preparing monthly monitoring reports.
Zero environmental pollution incidents Achieved
Instrumenta- Responsible for the daily management, maintenance, and repair of automatic online monitoring instruments and
tion Depart- equipment, as well as establishing management protocols and ledgers; also oversees the implementation of work
Workshop manage the daily operation and maintenance of workshop monitoring equipment, as well as the recording,
compilation, and reporting of monitoring data and the maintenance of relevant ledgers.
Other Departments Support environmental monitoring activities as required.
Sustainability Report 2025
Pollutant Management Strategy Waste Gas Emission Management
The Company implements categorized treatment and precise control for different types of waste gas, adopting specialized
treatment approaches tailored to each specific situation. We continuously strengthen routine inspections and real-time online
Hengli Petrochemical attaches great importance to pollutant prevention and control. The Company encourages its industrial
monitoring of waste gas treatment facilities, conduct internal monitoring in accordance with established standards, and
parks to implement key pollutant management strategies tailored to their unique production and operational profiles. To ensure
commission third-party organizations to perform regular testing, thereby ensuring the effectiveness of waste gas treatment
the effective operation of pollutant management efforts, these parks establish pollutant management systems aligned with their
throughout the end-to-end process. In 2025, the Company achieved 100% compliance with waste gas emissions.
specific production characteristics, set up dedicated EHS departments, and define annual targets and work plans for pollutant
control.
Key Performance
Unit 2025
Impact, Risk and Opportunity Management Total waste gas emissions Ton 5,588,908,418
Waste gas emission intensity Tons per million yuan of revenue 27,807.45
Management Process Nitric oxide (NOx) Ton 4,616.06
Sulfide (SOx) Ton 1,908.69
Hengli Petrochemical abides by laws and regulations such as the Environmental Protection Law of the People's Republic of China, Particulate matter (PM) Ton 349.96
the Water Pollution Prevention and Control Law of the People's Republic of China, the Air Pollution Prevention and Control Law of
the People's Republic of China, and the Law of the People's Republic of China on the Prevention and Control of Environmental Volatile organic compounds (VOCs) Ton 587.33
Pollution by Solid Waste, as well as the Company's internal management systems. The Company conducts standardized
management and control of the end-to-end of wastewater, waste gas, and solid waste disposal, strictly complies with emission Note 1: The statistical scope of waste gas data covers Hengli Petrochemical (Dalian), Hengli Petrochemical Refining, Hengli Petrochemical (Dalian)
thresholds, and ensures stable compliance and proper disposal of all types of pollutants. New Material, Kanghui Dalian New Material, Hengli Chemical Fiber, Susheng Thermal Power, Hengke Advanced Materials, Jiangsu Xuanda,
Kanghui Nantong, Kanghui New Material, Deli Chemical Fiber, Hengli Petrochemical (Huizhou), and Jiangsu Kanghui.
Note 2: The pollutant discharge situation of subsidiaries listed as key environmental supervision units by environmental protection authorities will
Management Process for Pollutant-Related Impacts, Risks and Opportunities be detailed in Hengli Petrochemical Annual Report 2025.
Wastewater Discharge Management
Hengli Petrochemical adheres to the principles of "separating clean and wastewater and treating different types of wastewater
Systematically identify environmental factors related to pollutants by comprehensively reviewing the
generation processes, discharge pathways, and environmental impacts of various pollutants—including separately". The Company has scientifically planned and designed its drainage system to enable categorized collection and
wastewater, waste gases, noise, solid waste, and hazardous waste—across the entire production and treatment based on wastewater characteristics. Internally, the Company has developed and strictly implements its own
Identification operations process. self-monitoring program and established an online monitoring system. Additionally, it commissions third-party professional
organizations to conduct supervisory testing, thereby monitoring water quality throughout the process to ensure stable compli-
ance with all wastewater discharges.
For each identified environmental factor, the system conducts systematic environmental impact
analyses, environmental risk assessments, and opportunity evaluations, using a combination of qualita- Key Performance
Unit 2025
tive and quantitative methods for tiered evaluation and scoring.
Evaluation
Total Wastewater Discharge Ton 28,505,410
Wastewater Discharge Intensity Tons per million yuan of revenue 141.83
The Company's industrial parks have established pollutant monitoring structure, enabling real-time
monitoring of all indicators. When any indicator exceeds the limit or an anomaly is detected, the issue is COD Emissions Ton 751.84
Monitoring promptly reported to the EHS Department, and an investigation is immediately initiated.
Ammonia Nitrogen Emissions Ton 9.98
Total Phosphorus Emissions Ton 5.68
Based on monitoring results, we identify key focus areas for pollutant management and enhance the
management of environmental impacts, risks, and opportunities through the development of annual Total Nitrogen Emissions Ton 188.65
plans and the implementation of preventive measures.
Management Note 1: The statistical scope of wastewater data covers Hengli Petrochemical (Dalian), Hengli Petrochemical Refining, Hengli Petrochemical
(Dalian) New Material, Kanghui Dalian New Material, Hengli Chemical Fiber, Susheng Thermal Power, Hengke Advanced Materials, Jiangsu
Xuanda, Kanghui Nantong, Kanghui New Material, Deli Chemical Fiber, Hengli Petrochemical (Huizhou), and Jiangsu Kanghui.
Note 2: The pollutant discharge situation of subsidiaries listed as key environmental supervision units by environmental protection authorities will
be detailed in Hengli Petrochemical Annual Report 2025.
Sustainability Report 2025
Key Performance
Unit 2025
General Waste Ton 3,435,469
Biochemical
Tank
Sand and Hazardous Waste Ton 153,946
Sedimen-
Activated
tation Tank
Carbon Filter
Hazardous Waste Intensity Tons per million yuan of revenue 0.77
Compliance Rate of Hazardous Waste Disposal % 100
UASB Reclaimed Water
Measures to reduce wastewater discharge Reuse Tank at the
(Upflow Anaerobic Note: The statistical scope of waste data covers Hengli Petrochemical (Dalian), Hengli Petrochemical Refining, Hengli Petrochemical (Dalian) New
Sludge Blanket) Wastewater Material, Kanghui Dalian New Material, Hengli Chemical Fiber, Susheng Thermal Power, Hengke Advanced Materials, Jiangsu Xuanda, Kanghui
reactor Treatment Station Nantong, Kanghui New Material, Deli Chemical Fiber, Hengli Petrochemical (Huizhou), and Jiangsu Kanghui.
(WWTP)
Information-based Supervision of Hazardous Waste
The Company requires that vehicles transporting hazardous waste within the facility be equipped with GPS
and follow designated routes. Additionally, it employs intelligent IoT monitoring measures—including smart
weighing systems, QR code electronic tags, electronic ledgers, electronic waybills, real-time upload of
transport trajectories, and handheld terminals—enabling real-time, dynamic, and early-warning-based
remote monitoring that is fully traceable and information-driven throughout the process.
Refinery Wastewater Aromatics Wastewater Chemical Wastewater Power Plant FGD Wastewater
Waste Fusel Oil Solution Ethylene Waste Caustic Compliant Effluent Water Reused Water
Indicators and Targets
Measures to reduce wastewater discharge
In 2025, the Company engaged a third-party professional organization to conduct systematic interviews and on-site surveys at
Hengli Chemical Fiber 2000t/d Membrane Treatment Reclaimed Water Reuse + Concentrated all its industrial parks. This initiative comprehensively reviewed the current status of the generation, treatment, and discharge of
Case
Water Treatment Project wastewater, waste gas, and general solid waste across each industrial park. It precisely identified opportunities for the reduction,
resource utilization, and harmless treatment of these "three wastes" and scientifically evaluated environmental management
As of the end of the reporting period, Hengli Chemical Fibers' 2,000 t/d membrane-based reclaimed water reuse shortcomings and potential for improvement. Based on this, and in alignment with industry best practices and regulatory
and concentrate treatment project was officially completed and commissioned. The project employs a "ultrafil- requirements, the Company formulated and established the following annual environmental protection and emissions reduction
tration + reverse osmosis" dual-membrane treatment process, which effectively removes suspended solids, targets. During the reporting period, the Company tracked and assessed the environmental targets set for 2024, and the annual
colloids, dissolved salts, and organic matter from the raw water, ensuring that the final reclaimed water meets targets for 2025 were substantially achieved.
the standards for industrial cooling water makeup. The project is designed to treat 2,000 tons of wastewater daily
and has been operating smoothly since commissioning. During the reporting period, the project reduced waste- Indicators and Targets for 2026
water discharge by 400,000 tons through reclaimed water reuse, contributing positively to alleviating pressure
on the regional water environment.
Type Target
Wastewater Target wastewater discharge volume≤32,000,000 tons
Waste Management
Target emissions of nitrogen oxides (NOx)≤9,000 tons
The Company strictly regulates the end-to-end process of general waste generation, collection, transportation, storage, and
transfer. It requires relevant responsible parties to improve record-keeping and dynamic management, conduct regular supervi- Target emissions of sulfides (SOx)≤40,000 tons
Exhaust Gas
sion and evaluations of partner entities, and continuously strengthen process control. The Company's hazardous waste
Target emissions of particulate matter≤900 tons
management adheres to the principles of "the supervisor bears responsibility" and the polluter pays. Each industrial park formu-
lates a series of internal management systems—including the Hazardous Waste Management System and the Hazardous Waste
Target emissions of VOCs≤1,500 tons
Environmental Pollution Prevention and Control Responsibility System—tailored to its specific operations. These systems ensure
end-to-end, traceable management of hazardous waste generation, storage, transfer, and disposal, and establish hazardous
Solid Waste The target generation volume of solid waste≤6,660,000 tons
waste management archives and ledgers that accurately document details such as the types of hazardous waste generated,
generation volumes, generation stages, flow paths, storage conditions, and disposal status.
Sustainability Report 2025
Response to Climate Change Organizational Structure for Climate Change Tackling
Hengli Petrochemical actively implements the national goals of "carbon peak and carbon neutrality". The Company has estab-
As the top leadership, it bears ultimate responsibility for climate
lished green, low-carbon, and sustainable development as a central guiding principle for its high-quality growth, and has fully Board of Directors
change impacts, risks, and opportunities.
integrated this principle into its corporate strategy and long-term strategy. In response to these national goals and in alignment
with international consensus and standards such as the Paris Agreement and the 2030 Agenda for Sustainable Development, the
Company upholds compliant operations and adopts a systematic approach to continuously advance its green and low-carbon Decision-Mak- Responsible for supervising ESG management, including climate
Strategy and Sustain-
transformation and its response to climate change. Through these efforts, Hengli Petrochemical diligently fulfills its environmen- ing Level change risk identification, assessment, and management, and
ability Committee
tal and social responsibilities. reports regularly to the Board of Directors on climate change issues.
Governance
Composed of General Managers of subsidiaries and heads of various
Leading Group for
departments, the Group is responsible for overseeing and guiding
The Company is enhancing the improvement of its internal mechanisms in areas such as organizational structure, institutional Climate-Related Work
the Company's daily climate-related management.
regulations, and oversight and evaluation, with the aim of standardizing climate change and greenhouse gas emissions Management
management, ensuring the quality of carbon emissions data, and fully implementing the strategic goals of "carbon peak and Level
carbon neutrality".
Organization and Capacity Building
Responsible for organizing carbon emission monitoring, data
The Company has established a top-down organizational structure for climate change gover- EHS Department and Other
management and verification, as well as training and awareness
Relevant Departments
nance and continues to strengthen the professional capabilities of its governance team. By reg- promotion.
Execution Level
ularly conducting specialized training and certification programs on carbon management, it
comprehensively enhances all employees' competency in fulfilling low-carbon responsibilities.
Institutionalized and Standardized Operation
Taking into account the operational realities of each industrial base, the Company has formulated
specialized management systems, including the Carbon Emissions Management System and the
ESG and Climate Change Management System. The Company has established a regulatory frame-
work covering carbon emissions data quality control, end-to-end emissions management, green-
house gas verification, and coordinated ESG governance, ensuring that climate governance efforts
are conducted in accordance with established procedures and operate in a standardized manner.
Closed-Loop Supervision and Assessment
The Company has established a mechanism for routine supervision, inspection, and target
assessment. By integrating carbon reduction targets into the performance appraisal systems for
management and key positions, the Company ensures clear individual accountability for all
carbon reduction initiatives and guarantees their effective implementation.
Sustainability Report 2025
Strategy Type Climate-related Risks
Probability
of Time Horizon Financial Impact Response Measures
Occurrence
In response to global climate change and the industry's transformation toward green and low-carbon transition, Hengli Petro-
chemical, with reference to the TCFD framework and taking into account the characteristics of the petrochemical industry and Market
its entire industry chain footprint, has conducted an analysis of climate-related risks and opportunities. The Company has
As consumers become more environmentally
systematically identified climate-related risks and opportunities and implemented response measures. Optimize product portfolios, increase the
conscious, they increasingly favor green,
Decline in sales of traditional products, supply of low-carbon products, and align
low-carbon petrochemical products, leading
downward pressure on pricing, and with the trend toward upgraded
Climate Change Risk List to a decline in demand for traditional
decrease in revenue and gross margin. consumer demand.
high-carbon products.
Medium Long-term
Poor investment decisions and Closely monitor market signals, establish
Probability Tran- Fluctuations in market signals—such as
underutilized production capacity have a dynamic decision-making mechanism,
of Time Horizon sition low-carbon policies, carbon pricing, and
Type Climate-related Risks Financial Impact Response Measures led to a decline in profit stability. and mitigate the impact of policy and
Occurrence Risk low-carbon product standards—are making
market fluctuations.
business decision-making more challenging.
Acute
Increased equipment maintenance costs, Reinforce protective facilities, develop
production downtime leading to revenue contingency plans, and enhance our Reputation
The intensification of extreme weather losses, and rising costs associated with ability to respond to extreme weather
events such as typhoons and floods could contract breaches. conditions.
damage equipment at the Company's
As consumer demand for low-carbon
coastal facilities in Dalian and elsewhere, Increased logistics costs, decreased Develop a portfolio of low-carbon
Optimize logistics arrangements, products grows, a shortage of such products
leading to production disruptions. Short-te Declining brand recognition indirectly products, publicly report on progress
Small capacity utilization, and rising operating stockpile emergency raw materials, and can damage the Company's brand
rm impacts revenue and market share. toward transformation, and meet green
costs. refine production contingency plans. reputation. Medium
External factors such as natural disasters demand.
Small and Long
and geopolitical conflicts could disrupt Lack of confidence in the capital markets
Increased costs for equipment Upgrade equipment cooling systems, Negative public sentiment regarding high term
logistics and the procurement of raw leads to rising financing costs and Fulfill low-carbon responsibilities,
maintenance and cooling, decreased optimize operational workflows, and carbon emissions in the petrochemical
Physi materials. reduced willingness to partner. strengthen compliance, and set a green
production efficiency, and potential safety strengthen heat protection measures. industry can easily lead to doubts about the
cal benchmark.
losses. Company's reputation.
Risk
Chronic Continuously monitor changes in the raw
Rising raw material procurement costs materials market, conduct dynamic
may have an adverse impact on operating analysis and assessments, select
Uneven rainfall and climate fluctuations performance. appropriate procurement timing and
affect the transportation of raw materials flexible procurement methods, and utilize
and the continuity of production. Climate Change Opportunities List
hedging and other strategies to mitigate
Long-te fluctuations in raw material prices.
Small
Rising temperatures cause production rm
equipment to overheat, leading to an
increase in failure rates and compromising Type Climate-related opportunities Financial Impact
safety in production.
Reduction in fossil fuel purchases and carbon tax expenditures,
Policy and Legal Promote the transition to green electricity and green hydrogen; capture of green premiums, and boosted profitability.
leverage photovoltaic (PV) and green hydrogen-to-ammonia
projects to reduce emissions and avoid CBAM carbon taxes. Securing tax breaks and subsidies to supplement cash flow,
Prices for allowances in the national Energy Efficiency alleviating the financial pressure of transformation.
Promote energy conservation and carbon
carbon market continue to rise, which will Leverage the Technology Center to deploy new technologies
Risk of rising greenhouse gas emission reduction initiatives, strictly control total
directly drive up compliance costs. such as CCUS, collaborate with research institutions to Improvement in energy efficiency, optimization of the energy mix,
allowance prices. carbon emissions, and alleviate the cost
pressure associated with carbon implement these technologies, and optimize energy efficiency. reduction in energy consumption and operating costs, driving
Medium Traditional refining and petrochemical product premium pricing, and increasing profits.
Mandatory policies regarding low-carbon allowances.
Mediate and long products (such as PX, PTA, and
standards, energy efficiency standards, and
term conventional polyester ) face stricter
green product certification for petrochemical Align with low-carbon and energy
energy efficiency thresholds; facilities that
products are being introduced on an efficiency standards, pursue green
fail to meet these standards may be
ongoing basis. product certifications, and enhance Improve water resource recycling efficiency by implementing
subject to production restrictions,
product compliance capabilities. Improving the efficiency of recycling resources such as water water-saving technological upgrades (such as process optimization
shutdowns, or mandatory retrofits.
Tran- and raw materials can directly reduce production costs, and equipment upgrades).
Resource
sition decrease reliance on virgin resources, and minimize the
Risk Technology Efficiency environmental impact and potential compliance costs Enhance the recycling and reuse of waste yarn, packaging materials,
associated with water withdrawal and waste disposal. and other byproducts, committing to achieving efficient resource
utilization and effective waste recovery.
Core businesses such as PX and PTA, which
Focus on the research and development
are high-carbon products, face the threat of
of low-carbon products, promote circular
being replaced by low-carbon alternatives, Narrowing of gross profit margins,
economy technologies, and obtain
putting pressure on exports and slowing of profit growth, and increasing Develop green, low-carbon products and obtain relevant
international low-carbon certifications.
downstream demand. Medium R&D expenses. Developing low-carbon, eco-friendly products and services can certifications.
High and long
Strictly control risks associated with
Products and meet the market's growing demand for environmental
Investments in cutting-edge low-carbon term Potential asset impairments, exacerbated sustainability, enhance brand value and product competitive- Identify and develop new technologies and processes that help
technologies, such as green hydrogen and cash flow pressures, and delayed pace of
technology investments, strengthen Services
industry-academia-research collabora- ness, and potentially open up new market opportunities. reduce carbon emissions, and translate them into specific products
CCUS, carry risks related to technical transformation. or services.
tion, and establish an evaluation and exit
immaturity and commercialization falling
mechanism.
short of expectations.
Sustainability Report 2025
Climate Change Opportunities List
Carbon Emission Reduction Measures
Type Climate-related opportunities Financial Impact Hengli Petrochemicals' industrial parks are focusing on renewable fuels, the transition from coal to natural gas, PV power gener-
ation, and energy-saving retrofits. They are achieving this through the systematic implementation of measures such as energy
mix transformation, energy efficiency improvements, and awareness-raising initiatives. These measures work in concert to
Proactively adapt to the transformation toward a low-carbon Promote photovoltaic projects, implement energy-saving measures,
economy, enhance the Company's ability to respond to changes and advance energy integration.
effectively reduce carbon emissions.
Resilience in policies and regulations, attract green investment, take a
leading role in the industry's green transition, and cultivate a Develop projects for raw material substitution, promote alternative
responsible corporate image. resources, and optimize the resource structure.
Greenhouse Gas Recycling and Utilization Use of Renewable Fuels
Directly reducing greenhouse gas emissions through Using renewable biomass pellets as fuel to provide heat for
technologies such as CO₂ flash recovery, methane fuel polyester production, thereby reducing carbon emissions.
utilization, N2O removal and decomposition, etc.
Impact, Risk and Opportunity Management
Coal-to-Gas Conversion
Management Process Using natural gas as the fuel source for polyester synthesis, reducing coal consumption and lowering carbon emissions.
To systematically identify, assess, and manage climate-related risks and opportunities, Hengli Petrochemical has fully integrated
climate risk management into its environmental management system. The Company has established a closed-loop management
mechanism covering the end-to-end process of risk identification, analysis and assessment, and response implementation, to PV Power Generation Energy Conservation and Emission Reduction Retrofits
dynamically respond to the various challenges and development opportunities arising from climate change. The Company's
climate risk management process is as follows: Developing PV power generation projects, deploying Implementing energy-saving projects such as polyester
integrated "PV + energy storage" systems, and building a waste heat refrigeration, optimization of compressed air
new green energy system. pressure levels, and variable-frequency motor retrofits,
resulting in reducing carbon emissions.
The Company's industrial parks actively conduct climate-related risk identification, compre-
hensively mapping and analyzing potential climate risk points centering on each production
workshop and key business processes.
Risk Identification
Carbon Reduction Training and Awareness Promotion
Providing employees with training on climate change policies and regulations, carbon accounting methodol-
ogies, and carbon reduction measures, to strengthen the carbon management talent pool and enhance
For the identified risks, evaluations and scoring are conducted based on criteria such as the capabilities in product carbon footprint accounting, control, and disclosure.
scope of impact, frequency of occurrence, and materiality to the Company.
Analysis and Evaluation
Based on the risk assessment results, targeted response measures are formulated for
various climate risks, with responsible departments and planned completion deadlines
clearly defined, ensuring risks remain controllable throughout the process and are resolved
through closed-loop management.
Response Each industrial park, based on its actual production and operations, establishes a tailored
Implementation evaluation index system for climate risk management, and conducts regular assessments
and reviews of its climate risk management practices.
Sustainability Report 2025
Take Multiple Measures to Promote Carbon Reduction
Process Optimization and Energy-Saving Retrofits
CO₂ Resource Utilization Project
The diesel hydrogenation unit optimized the process flow path by diverting the heavy naphtha from the top of
the distillation column directly to the naphtha separation column, bypassing the stabilizer. This measure not only A CO₂ flash system was added to the low-temperature methanol wash process in the coal-to-hydrogen facility.
reduced the load on the stabilizer but also effectively mitigated vibration issues in the feed control valve of the This system delivers high-purity CO₂ gas (over 98%) to the DMC production line as feedstock for manufacturing
naphtha separation column, thereby overcoming operational bottlenecks. Consequently, the consumption of 3.6 electronic-grade DMC, PC, and other chemical products. As of the end of the reporting period, the project has
MPa steam at the bottom of the stabilizer was significantly reduced, resulting in an annual carbon emission achieved a cumulative resource utilization of over 261,187 tCO₂ since its commissioning.
reduction of 68,900 tCO₂e.
PV Power Generation and Energy Storage
Core Tower Internals Retrofit
In 2025, Hengke Advanced Materials implemented 24 energy-saving technological transformation projects,
Upgrading the core internals of the distillation tower in the ethanolamine unit overcame the challenges of including the third phase of the 20MW/40MWh user-side energy storage project, the green and low-carbon
marginal product color specifications and high energy consumption, driving a comprehensive optimization of technical renovation project for optimizing pressure level control in the air compression system, the installation
the product mix. Following the technical retrofit, all energy consumption metrics declined to varying degrees, of variable frequency drives for circulating water pumps in the HK Zone, and condensate recovery in the polyes-
and energy utilization efficiency was significantly enhanced, resulting in an annual carbon emission reduction of ter division. The total investment in energy-saving technical retrofits for 2025 amounted to 75.91 million yuan,
Medium-Pressure Condensate Recovery and Utilization Technical Retrofit
To address the issue in the original design of the DPC unit's medium-pressure steam condensate tank—where
insufficient pressure prevented the flashing of 2.3 MPa steam—a new 1.0 MPaG steam header pipeline was
installed at the tank top. This enabled the external utilization of flash steam generated from the condensate
energy into usable steam. This improved energy utilization efficiency, resulting in an annual carbon emission
reduction of 16,400 tCO₂e.
Phase Ⅲ Energy Storage Project (Jiangsu Xuanda) Air Compressor Retrofit Project (Hengke Advanced Materials)
Carbon Footprint Verification and Certification (Partial)
Hengli Chemical Fiber Hengli Petrochemical (Huizhou)
Carbon Footprint Management FDY (Full Drawn Yarn) Product Carbon Footprint Certification; Carbon Footprint Certification for Purified
LCA Certification for Acrylic Fiber and Semi-dull Chip Products Terephthalic Acid (PTA) Products
The Company and its subsidiaries attach great importance to product carbon footprint management and actively respond to
market demand for environmental transparency. In accordance with the international standard ISO 14067:2018 for product Kanghui New Material Hengke Advanced Materials
carbon footprints, the Company systematically conducts Life Cycle Assessments (LCAs), calculates the carbon footprints of key Carbon Footprint Certification for Polybutylene Terephthalate Carbon Footprint Certification for Polyester
products, and secures third-party verification and certification. Product carbon footprint reports and certificates issued by (PBT) Products and Tetrahydrofuran (THF) Products Drawn Filament Products
professional third-party institutions provide a data foundation for internal process optimization and supply chain emissions
reductions. This indirectly enhances the environmental credibility and market competitiveness of the Company's products,
representing a key initiative to proactively adapt to global trends in low-carbon trade and green consumption.
Carbon Footprint Certification Certificate
Sustainability Report 2025
Indicators and Targets
Case Product Carbon Footprint Training
To support the early achievement of the national "Carbon Peak and Carbon Neutrality" goals, the Company optimized and
adjusted its long-term climate targets for 2025. Each industrial park established detailed carbon reduction targets and, through
initiatives such as renewable fuel substitution, coal-to-gas switching, PV power generation, green electricity utilization, and
During the reporting period, Hengli Chemical Fiber conducted specialized training on product carbon footprint
energy-saving technical retrofits, steadily advanced various emission reduction tasks to ensure that carbon reduction targets
management. Experts provided detailed insights into the "Carbon Peak and Carbon Neutrality" policy framework
were met on schedule. During the reporting period, the Company's carbon reduction targets were substantially achieved.
and the core content of the Greenhouse Gas—Quantification Method and Requirements for Carbon Footprint of
Products—Man-made Fibres (GB/T45540-2025) standard. The training emphasized national and local carbon
policy directives, as well as carbon emission accounting and reporting requirements specific to the chemical fiber Type Targets of Carbon Management
industry. Additionally, tailored to Hengli Chemical Fiber's product characteristics, the session addressed key
Carbon Peak 2030
challenges and practical techniques in calculating product lifecycle carbon footprints, thereby enhancing
employees' knowledge of carbon footprint management. Carbon Neutrality 2060
By 2026, the cumulative reduction in v emissions from
CO₂ Emission Reduction
energy-saving projects will be no less than 2 million tons.
By 2026, the carbon emission intensity per unit of output
Carbon Emission Intensity Reduction
value will be reduced by 2%.
By 2026, the cumulative volume of CO₂ recovered and
utilized will reach 400,000 tons; from 2027 to 2030, an
CO₂ Recovery and Utilization Base Year: 2024 additional 600,000 tons of CO₂ will be cumulatively
recovered and utilized.
By 2028, green electricity usage consumption will reach
Green Electricity Consumption
By 2030, all major production and operation units of the
Green Energy Coverage Rate
Company will be fully powered by renewable energy.
Greenhouse Gas Emission Data
Key Performance Unit 2025
Total Greenhouse Gas Emissions tCO₂e 45,949,346
Greenhouse Gas Emission Intensity tCO₂e/million yuan of revenue 228.62
Scope 1 Greenhouse Gas Emissions tCO₂e 38,434,129
Scope 2 Greenhouse Gas Emissions tCO₂e 7,515,217
Note 1: The Company's greenhouse gas emissions primarily originate from direct emissions (Scope 1) caused by fossil fuel combustion and
industrial production processes, as well as indirect emissions (Scope 2) resulting from the purchase of electricity and heat. The accounting of Scope
Petrochemical Enterprises in China (Trial), the Guidelines for the Accounting and Reporting of Greenhouse Gas Emissions from Power Generation
Facilities, and the Announcement on Carbon Dioxide Emission Factors for Power Generation issued by the Ministry of Ecology and Environment.
Note 2: The data coverage includes Hengli Petrochemical (Dalian), Hengli Refinery, Hengli Petrochemical (Dalian) New Material, Kanghui Dalian
New Material, Hengli Chemical Fiber, Susheng Thermal Power, Hengke Advanced Materials, Jiangsu Xuanda, Kanghui Nantong, Kanghui New
Material, Deli Chemical Fiber, Hengli Petrochemical (Huizhou), and Jiangsu Kanghui. In 2025, Kanghui Dalian New Material, Kanghui Nantong, and
Jiangsu Kanghui were newly included in the scope.
Sustainability Report 2025
ISO 50001:2018 Energy Management System Certification (Part)
Efficient Utilization of Resources
In terms of resource management, Hengli Petrochemical comprehensively improves resource utilization efficiency, driven by
technological innovation, guided by circular economy practices and supported by meticulous management. The Company
focuses on the high-energy and high-water-consumption stages of chemical production, developing and implementing a series
of green systems that significantly enhance resource conversion efficiency and recycling rates. Through systematic technologi-
cal innovation and scenario-based circular pathways, the Company continues to lead the way in efficient resource utilization,
providing a replicable and scalable model for the industry's green transformation and high-quality development.
Energy Utilization
Energy Management System
In accordance with GB/T 23331-2012 Energy management systems—Requirements and guidance for use and ISO 50001, as well
Hengke Advanced Materials Hengli Petrochemical (Dalian) Hengli Petrochemical (Huizhou)
as other relevant energy management standards, Hengli Petrochemical's industrial parks have formulated and continuously
improved an institutional framework, including the Energy Management Manual, the Energy Resource Control Procedure, the
Energy Measurement Control Procedure, the Energy Operation Control Procedure, and the Energy Review Control Procedure.
These frameworks outline scientific and standardized energy management processes and systems, clearly defining energy
policy and objectives, the basic requirements for planning and implementing the energy management system, as well as the
procedures for internal audits and management reviews, thereby ensuring the efficient use of energy.
Key Performance
Tailored to their specific production characteristics and energy consumption patterns, Hengli Petrochemical's industrial parks
have established a well-defined, hierarchical energy management organizational structure with clear responsibilities and
By 2025, the proportion of the Company's major manufacturing subsidiaries that have obtained ISO50001 energy
strengthened cross-departmental coordination mechanisms. The Company's management oversees the overall planning and
coordination of energy management, setting its strategic direction and objectives. Each subsidiary establishes an energy management system certification was 100%.
management system in accordance with relevant requirements with its management responsible for its implementation and
maintenance, setting specific energy management objectives, and coordinating the execution of all energy management tasks.
The EHS and relevant departments of each subsidiary perform specialized management functions, specifically responsible for
energy data statistics and analysis, energy quota assessment, energy monitoring, energy management reviews, and daily
coordination. Each plant, as the primary responsible entity, is tasked with implementing energy-saving plans and measures on
the production floor to ensure the effective achievement of energy management objectives.
During the reporting period, owing to its outstanding performance in energy efficiency management, green transformation, and Strengthen Energy-saving Measures
technological innovation, Hengli Petrochemical continued to achieve excellence in resource efficiency benchmarks. Following
the earlier recognition of three companies within the Hengli (Dalian Changxing Island) Industrial Park as industry "Energy With a focus on energy management, the Company has established a core strategy centered on "Institutionalized Control,
Efficiency Leader" and "Water Efficiency Leader", Hengli Petrochemical (Huizhou) not only sustained its leadership in industry End-to-End Optimization, and Continuous Improvement." Guided by the three key objectives — Compliance and Cost Reduc-
energy efficiency with its PTA products but also emerged as the sole "Water Efficiency Leader" in this field. Concurrently, Hengke tion, Energy Efficiency Enhancement, and Green and Low-Carbon Transition— the Company is systematically advancing the
Advanced Materials was awarded the national "Energy Efficiency Leader" in the polyester industry by the Ministry of Industry implementation of its energy management system.
and Information Technology (MIIT), standing as the only selected enterprise in the polyester segment.
Sustainability Report 2025
Establishing an Energy Risk and Opportunity Management Mechanism.
Each industrial park of the Company has formulated multi-level energy consumption monitoring indicators and simultaneously
implemented dynamic performance monitoring, designating energy consumption as a key control indicator. A periodic reporting
The Company has established and implemented an end-to-end management mechanism—spanning daily, weekly, and monthly intervals—has been established to ensure timely response to issues, prompt
mechanism that covers the assessment of energy consumption impacts, energy
adjustment of measures, and swift implementation of improvements.
supply risks, and opportunities for new energy development. This mechanism
systematically evaluates energy efficiency, identifies risks associated with energy
price fluctuations and regulatory compliance, and uncovers potential opportuni-
ties for optimizing the energy mix and upgrading technology, with the aim of
achieving integrated management of energy consumption and benefits.
Key Performance Unit 2025
Total Energy Consumption tce 16,492,565
Conducting Regular Energy Review to Identify Energy-saving Potential
Energy Consumption Intensity tce/million yuan of revenue 82.06
The Company organizes a comprehensive energy review annually to Total Direct Energy Consumption tce 15,418,916
systematically analyze the status of energy use and consumption, create
energy balance sheets and flow diagrams, and identify energy-saving
potential across eight dimensions, such as energy substitution, process Including: Thermal Coal Ton 10,318,192
optimization, and equipment upgrades. It then ranks improvement
opportunities using a three-criteria scoring method based on energy
savings, payback period, and investment amount, compiling a Summary Natural Gas 10,000 m? 44,854
Table of Energy Improvement Opportunities. Based on this, it formulates
Developing Specialized Work Plans and and implements targeted management plans accordingly.
Clarifying Implementation Pathways Total Indirect Energy Consumption tce 705,734
To implement energy management strategies
and annual goals, each industrial park
formulates specialized energy management Including: Total Amount of Purchased Electricity MWh 5,493,252
plans tailored to its specific business
operations. These plans establish concrete
work requirements and quantifiable metrics
across multiple areas, including energy Note: The statistical scope of energy data covers Hengli Petrochemical (Dalian), Hengli Refining & Chemical, Hengli Petrochemical (Dalian) New
consumption statistics, oversight of key Material, Kanghui Dalian New Material, Hengli Chemical Fiber, Susheng Thermal Power, Hengke New Materials, Jiangsu Xuanda, Kanghui
energy-consuming equipment, advancing Nantong, Kanghui New Material, Deli Chemical Fiber, Hengli Petrochemical (Huizhou), and Jiangsu Kanghui.
ongoing energy-saving projects, and Allocating Dedicated Funds to Implement
renewable energy utilization, thereby driving Energy-saving Retrofits
the effective execution and tangible results of
energy management initiatives. These funds are directed toward energy efficiency
diagnostics for key energy-consuming equipment, the
recovery and utilization of waste heat and pressure,
and the development of clean energy projects such as
photovoltaic and energy storage systems.
Carrying out energy conservation reviews for
construction projects and conducting specialized
energy conservation training
Strengthen the refined control of the end-to-end
process from energy procurement, processing
and conversion to end-use, and enhance the
energy-saving awareness of all employee in daily
operations.
Sustainability Report 2025
Digital Management of Energy
Key Performance Unit 2025
Hengli Petrochemical's industrial parks are actively advancing digital energy management. By establishing comprehensive
energy monitoring systems, they have achieved precise control over energy usage, laying a solid foundation for energy conser- Water Withdrawal 10,000 tons 20,612
vation efforts. During the reporting period, the "Microgrid Intelligent Control Platform" independently developed by Hengke
Advanced Materials was selected for the Ministry of Industry and Information Technology's "National Industrial Power Conventional Water Withdrawal (Fresh Water) 10,000 tons 14,907
Demand-Side Management Typical Cases 2025." The platform aligns closely with the Ministry's key focus areas for these typical
cases: New User-Side Energy Storage, Digital Energy Management, and Intelligent Energy Consumption Control. The platform Unconventional Water Resources Withdrawal 10,000 tons 5,705
features a PV installed capacity of 106.5 MW, generating over 100 million kWh of electricity annually. Combined with a 60
Total Water Consumption 10,000 tons 7,309
MW/120 MWh energy storage system and 3.5 MW of adjustable air conditioning load, it achieves minute-level response
capabilities and full-load controllability and flexibility, establishing a coordinated PV-Storage-Charging dispatch system.
Water Consumption Intensity Tons per million yuan of revenue 363.64
Total Water Usage 10,000 tons 699,968
Volume of Circulating Water 10,000 tons 679,356
Circulating Water Water Rate in Total Water Usage % 97.06
Note 1: The statistical scope of water resource data covers Hengli Petrochemical (Dalian), Hengli Petrochemical Refining, Hengli Petrochemical
(Dalian) New Material, Kanghui Dalian New Material, Hengli Chemical Fiber, Susheng Thermal Power, Hengke Advanced Materials, Jiangsu
Xuanda, Kanghui Nantong, Kanghui New Material, Deli Chemical Fiber, Hengli Petrochemical (Huizhou), and Jiangsu Kanghui.
Note 2: Unconventional water withdrawal refers to reclaimed water; the data includes desalinated seawater and reused water.
Note 3: The data for total water usage includes both water withdrawal and circulating water.
Hengli Petrochemical Refining - Digital Hengke Advanced Materials - Microgrid
Platform for Energy Management Intelligent Control Platform Water-saving Measures and Recycling
The Company efficiently utilizes water resources through dedicated funding and the implementation of a series of water-saving
technical retrofit projects.
Water Resource Utilization
Wastewater Recycling Circulating Water and Seawater Utilization
A portion of the wastewater from the Demineralized Water Station The Circulating Water Station employs a closed-loop
Water Resource Management System is recovered and sent to the Water Treatment Plant, reducing
discharge; a dedicated RO concentrate treatment line has been
freshwater circulation system and direct seawater
cooling, significantly reducing makeup water
installed at the wastewater treatment plant to achieve full reuse of requirements; seawater cooling is used for coolers and
wastewater. surface condensers in multiple units, conserving water.
The Company and its subsidiaries adhere to relevant laws and regulations, including the Water Law of the People's Republic of
China, and have formulated water resource usage policies and management systems such as the Water Conservation Manage-
ment System and the Water Usage Statistics Management System to ensure standardized and systematic water resource Optimization of Air Cooling and Heat Exchange
Management and Awareness Air cooling is extensively utilized in units such as
management. The Company has established and refined its organizational structure for water resource management, with the Water conservation awareness campaigns are
Water-saving atmospheric and vacuum distillation, light hydrocarbon
Chairman overseeing the development of water resource management initiatives, while the General Manager and Deputy strengthened to enhance employees' water conservation recovery, lubricating oil isomerization and dewaxing,
Measures and
awareness and sense of responsibility. kerosene hydrogenation, paraffinic hydrocracking, and
General Managers are responsible for water resource management strategy and performance oversight. By establishing a water Recycling
sulfur units. Heat exchange processes are optimized to
resource metering network, the Company enables the real-time collection and accurate statistics of water usage data. Water reduce cooling water consumption.
usage metrics are incorporated into the performance evaluations of subsidiary heads, paired with clear incentive and account-
ability mechanisms, thereby driving water conservation at the source. At the beginning of each year, each subsidiary formulates
its annual water withdrawal plan and monthly allocation plan. A dedicated water conservation management department super-
vises water resource usage, regularly conducts benchmarking and analysis of water consumption, and reports the findings to Synergistic Energy and Water Conservation Reuse of Purified Water and Condensate
Back-pressure steam turbine generators are selected to improve Stripped water is used in multiple locations to replace
senior management.
energy utilization efficiency, thereby reducing water consumption; fresh water for injection and washing purposes;
waste heat recovery stations are constructed to reduce heating and condensate is recovered from sulfur and heating systems
The Company has set a target to reduce fresh water usage intensity by more than 3% by 2028, using the 2024 level as a baseline, circulating water consumption. to increase water reuse rates.
and has implemented a quarterly assessment mechanism for water consumption per unit of product. In 2025, water use efficien-
cy across all industrial parks generally met standards, and through continuous management and monitoring, the Company
effectively advanced the achievement of its water conservation targets. Note: For more water conservation measures, please visit our official website.
Sustainability Report 2025
Seizing Clean Technology Opportunities Category Implementation and Outcomes
Focusing on key clean energy sources such as photovoltaic power generation, biogas
power generation, and biomass fuels, to advance energy substitution solutions
Hengli Petrochemical firmly believes that green innovation serves as the core engine driving future sustainable development. In
response to global climate challenges and resource constraints, the Company has deeply integrated clean technologies into all
Photovoltaic Power: The Hengli (Nantong) Industrial Park has extensively deployed solar power
phases of its entire industry chain, establishing clear objectives and a roadmap to ensure that all business segments comply with
capacity. As of 2025, the total installed capacity has reached 106.5 MW, generating over 100 million
and uphold advanced cleaner production standards, thereby advancing the development of a circular economy.
kWh of green electricity annually and reducing carbon emissions by approximately 60,000 metric
tons. To effectively consume green electricity and ensure grid stability, the industrial park simulta-
Increase Investment in R&D of Clean Technologies neously constructed a 60 MW energy storage system project. This system can discharge up to
In advancing the R&D and deployment of clean technologies, the Company adheres to a high-investment, strategically planned, daily charge-discharge cycles. This effectively alleviates peak hour electricity demand, reduces
and whole-industry-chain development strategy, thereby establishing a systematic and actionable implementation framework. power consumption costs, and provides robust support for the Company's sustainable develop-
ment and the achievement of national "carbon peak and carbon neutrality" goals.
The Company has set specific targets to increase investment in clean technology R&D, focusing on low-carbon technologies,
green new materials development, carbon capture and utilization, as well as waste treatment and recycling, which comprehen-
Clean Energy Substitution
sively cover its core business segments. This drives all industrial parks to achieve and uphold advanced industry standards for Biogas: Hengli (Dalian Changxing Island) Industrial Park is advancing the construction of new
cleaner production, establishing a replicable and scalable model for the circular economy. During the reporting period, invest- anaerobic reactors and biogas purification facilities. This initiative upgrades previously low-priced,
ments in clean technology continued to increase, substantially achieving the established targets. externally sold biogas into a resource for high-value internal reuse. Projected annual revenue
exceeds 45 million yuan, shifting from input-based pollution control to value-added recycling.
Key Performance
Biomass Fuel: Biomass is a widely available green and renewable resource whose application
significantly reduces emissions of nitrogen oxide and sulfur oxide emissions. Multiple industrial
In 2025, the Company invested 238 million yuan in clean technology, generating 156.2827 million parks utilize biomass pellets to replace traditional fossil fuels, actively implementing the energy
yuan in clean technology-related revenue and achieving cost savings of 294.2703 million yuan, which
substitution strategy.
equates to an emission reduction of approximately 1.0135 million metric tons of carbon dioxide equivalent.
Optimizing clean processes for resource utilization in key areas such as solid waste and
waste gas
Application and Effectiveness of Clean Technology
Hengli Petrochemical adheres to the development philosophy of clean and green circularity, applying clean technologies across Hengli Chemical Fiber collects and sorts waste yarn, polyester waste blocks, sludge, coal cinders,
the entire product lifecycle. Through measures such as energy substitution and process optimization, the Company achieves and desulfurization gypsum for resource utilization, achieving 100% utilization of waste yarn and
efficient resource utilization and turns waste into value, reducing environmental impact at the source and providing a reference production waste. During the reporting period, the solid waste resource utilization rate reached
for the industry's green development. 96.52%, meeting the Level I benchmark of the industry's cleaner production indicator system.
Key Performance
Kanghui Nantong leverages proprietary patented technology to advance the resource utilization of
Key Performance Unit 2025 waste gas. Through dichloromethane gas condensation and recovery technology, the company
Waste Resource
efficiently recovers reusable components from production exhaust gas, reducing annual raw
Utilization
PV Power Generation kWh 202,079,909 material consumption by over 1,000 tons. Meanwhile, by establishing a solid waste sorting and
recycling system, the resource utilization rate of production waste has reached over 95%, promot-
Biogas Power Generation kWh 361,129
ing a shift in waste management from end-of-pipe treatment to source-based recycling.
Biomass Fuel tce 343,035
Renewable Energy Consumption tce 367,915
Sustainability Report 2025
Category Implementation and Outcomes Category Implementation and Outcomes
Improving energy efficiency in production systems by advancing energy-saving retrofits
and process optimization, and by upgrading equipment, recovering waste heat, and Achieving packaging lightweighting and circular utilization by optimizing packaging design,
optimizing operations: promoting material reuse, and applying activated carbon regeneration technology:
Hengli Chemical Fiber implemented energy-saving retrofits for its air compressor system. By Hengli Chemical Fiber achieved lightweight packaging through optimized design and collaborated
optimizing equipment configuration and operating modes, it reduced electricity consumption and with downstream customers to promote packaging material recycling. By enhancing material
enhanced system operational stability, extending equipment lifespan and lowering maintenance protection during transportation and unpacking, it enabled the reuse of materials such as wooden
costs. frames and foam boards. During the reporting period, the reuse rate of 9-cell foam boards reached
Kanghui New Material implemented multiple energy-saving optimization projects for production Packaging effectively reducing packaging waste.
and utility systems. In the production phase, optimizing the THF production plan by consolidating Source
three production lines into two production units, reducing steam consumption by approximately The activated carbon adsorption process, widely used in wastewater treatment, often involves high
Reduction and
Circular
Energy Efficiency carbon disposal. Hengli (Dalian Changxing Island) Industrial Park utilizes advanced regeneration
process energy conservation, introducing waste heat recovery technology into the polyester film Utilization
Improvement and technology to restore the adsorption performance of spent carbon, facilitating its circular utiliza-
production process utilizes exhaust heat from cross-stretching to preheat fresh air. This is project-
Process Optimiza- tion. The annual regeneration volume exceeds 8,500 tons.
ed to reduce annual natural gas consumption by approximately 3.17 million cubic meters and CO₂
tion
emissions by 6,862 tons.
Kanghui New Material has further reduced energy consumption by optimizing energy-consuming
equipment and processes. For example, a retrofit project using condensate to replace steam for
Continuously advancing pollution control facility upgrades and improving treatment efficiency
space heating prevented energy waste. This condensate recovery is expected to save approxi-
and operational stability by optimizing wastewater and waste gas treatment processes:
mately 1,800 tons of steam annually and reduce carbon emissions by 550 tons. Additionally,
optimizing the operating pressure and frequency of the cooling water system achieved sustained
energy conservation. In wastewater treatment, Kanghui Nantong has optimized and upgraded its treatment process
flow, replacing traditional methods with new technologies such as "high-density clarification +
ozone + decarbonization filters." This approach enhances treatment stability while improving
pollutant removal efficiency, ensuring that pollutant emissions consistently meet and exceed design
standards.
Continuously improving water utilization efficiency through wastewater reuse, rainwater
harvesting, and water system optimization:
In terms of exhaust gas treatment, the vapor recovery system of the wet-process separator produc-
Pollutant tion line was retrofitted, adopting a "staged isolation + independent control" model. This allows
Hengli Chemical Fiber pioneered a wastewater reuse system in the industry, employing an anaero-
Emission each production line to operate independently, preventing cross-interference between gas flows
bic (UASB)–aerobic activated sludge treatment process. The reclaimed water reuse system utilizes
Reduction and fluctuations in emission concentrations. Additionally, the exhaust system structure was
UF ultrafiltration technology, with a 700,000 ton/year reclaimed water system utilizing UF ultrafiltra-
optimized to reduce the volume and concentration of discharged tail gas, thereby decreasing the
tion technology to achieve wastewater resource utilization. Additionally, it has effectively reduced
downstream treatment load and comprehensively improving waste gas treatment efficiency and
water waste by promoting water-saving fixtures, enhancing water management, and conducting
safety.
regular water balance tests.
Water Conserva-
Kanghui Nantong has achieved water resource recycling through multiple technical measures.
tion Retrofits and
Plume-abatement cooling towers were adopted in the cooling system to recover condensate and
Process Optimiza-
reduce makeup water demand. A high-density clarification system ensures zero process water
tion
discharge, and first-flush stormwater is collected and reused. During the reporting period, a cumu-
lative total of approximately 144,600 metric tons of rainwater was reused. Furthermore, through the
"high-density system+dual-membrane (UF+RO)" treatment process, reclaimed water is recycled
into the demineralized water system, further enhancing water recycling.
Sustainability Report 2025
Green Products and Resource Recycling
The Company has established a green supply chain system incorporating the Global Recycled Standard (GRS) and a hazardous
substance reduction assessment mechanism. By strictly controlling supplier onboarding and raw material composition, it
ensures product compliance with international environmental requirements. As of the end of the reporting period, certain
products from Hengli Chemical Fiber, Kanghui New Material, Hengke Advanced Materials, and Jiangsu Xuanda have obtained BPI Certification Kanghui New Material
GRS certification, achieving end-to-end traceability of recycled material content.
In product design, the Company is committed to developing eco-friendly materials and advancing the circular economy by
reducing material types, enhancing recyclability, and utilizing renewable resources.
GRS Certification Jiangsu Xuanda
As of the end of the reporting period, several biodegradable products have secured multiple
authoritative international certifications:
PBAT products
Obtained certifications across five categories, including BPI, DIN CERTCO (industrial composting, home
composting, and Seedling), OK compost / OK compost HOME, and JBPA, certifying complete biode-
gradability in both industrial and home composting environments.
PBS products
Obtained DIN CERTCO Seedling certification and biodegradability certification.
Modified PBAT products
In addition to existing PBAT certifications, newly achieved dual Australian industrial and home
composting certifications.
OEKO TEX STANDARD 100
Certification Hengli Chemical
Fiber
Furthermore, both virgin and recycled products from Hengli Chemical Fiber, Hengke Advanced Materials, and Jiangsu Xuanda
have passed the OEKO-TEX STANDARD 100 certification. This certification confirms that the products have passed testing for DIN Seedling Certification Kanghui New Material
harmful substances and meet human ecological requirements, further ensuring the safety and environmental quality of the
textiles.
Value Symbiosis,
Achieving Excellence with Craftsmanship
·Product Quality Management ·Upholding Innovation-driven ·Sustainable Supply Chain
Development
·Optimizing Customer Service ·Chemical Safety
·Strengthening Information
Security Risk Management
SDGs
Hengli Petrochemical remains committed to its responsibility and obligations to customers and stakeholders. The Company
reinforces product quality through rigorous quality management, delivers a trusted brand experience through efficient customer
service management, ensures stable operations through robust supply chain management, safeguards the baseline for develop-
ment by adhering to safety protocols, strengthens risk prevention and control through standardized management of chemicals,
and protects the trust of customers and stakeholders through comprehensive information security and privacy protection.
Guided by a sense of responsibility and our original mission, the Company continues to promote high-quality development and
sustainability.
Sustainability Report 2025
Product Quality Management Strategy
Hengli Petrochemical has consistently adhered to the quality management policy of "pursuing excellence in quality and continu-
ously improving management." Through implementing a comprehensive quality management strategy and integrating manage-
Governance ment systems for production safety, environmentally responsible production and occupational health, the Company is commit-
ted to continuously providing customers with high-quality and responsible products and services. The Company adheres to the
Hengli Petrochemical complies with relevant laws and regulations, including the Law of the People's Republic of China on Product ISO 9001 quality management system and relevant industry standards, and develops annual quality management planning.
Quality, and has established a life-cycle quality management system covering product R&D, production, sales, and after-sales Taking into corporate strategy, customer feedback, regulatory developments, and the previous year's performance, the Compa-
service. Each of Hengli Petrochemical's industrial parks has established a quality management system in accordance with ISO ny formulates the Annual Quality Objectives and Implementation Plan. This plan is translated into actionable projects, such as
product life cycle, including the Product Standardization Management System and the Product Internal Control Indicators Company continuously drives the effective operation and continuous improvement of its quality management system.
Management System. Each industrial park has established a three-tier quality management framework comprising
decision-making, management and execution, with clearly defined responsibilities and authorities, ensuring clear accountability
Impact, Risk and Opportunity Management
and effective implementation of quality controls.
The Company adopts the principle of proactive risk management and end-to-end control, and actively implements various
Quality Management Framework quality assurance measures. Through a range of measures such as strengthening product quality inspections, conducting
product quality training, and reinforcing quality awareness, the Company is comprehensively enhancing the risk prevention and
quality management capabilities of all management and employees.
Decision Layer General Manager
Full Life-cycle Quality Control
Management Layer Quality Management System Department (Enterprise Management Department)
Each of Hengli Petrochemical's industrial parks has established a full life-cycle quality accountability and traceability system.
Standardized quality controls are implemented at key stages, including incoming materials inspection and in-process quality
Execution Layer Quality Administrators, Inspectors and Front-line Employees
control. In addition, the Company has established standards and systems of quality evaluation to ensure that quality responsibil-
ities are effectively assigned and implemented at all levels.
Key Performance The Company implements strict identification and control over incoming raw materials, auxiliary materials,
Incoming Materials Inspection
intermediate products, and finished products to prevent unintended use or delivery.
During the reporting period, 100% of the Company's major manufacturing subsidiaries were certified under the ISO
Critical Control Point Management: The Company has developed procedures such as the Critical Control Point
Management System to monitor key production processes and critical control points, ensuring that products
the IATF 16949:2016 automotive quality management standard, signifying that their automotive fiber and new material meet applicable quality requirements.
Internal Control Indicator Management: To ensure the quality of finished products, policies, such as the Product
Production Process Quality
products have officially been recognized by the global automotive supply chain. Internal Control Indicator Management System, have been established to clearly define the internal control
Control
indicators required by product standards, thereby reducing the impact of analytical errors on quality assess-
ments. The Scheduling and Technical Department is responsible for the centralized management and for
formulating and reviewing these indicators, while each workshop carries out production and quality control in
Certification to the ISO 9001:2015 Quality Management System (Partial)
accordance with these indicators.
The Company has established policies, such as the Product Quality Control System for Finished Products, to
strictly define inspection requirements. Key parameters of production are not designated as periodic inspec-
Finished Production
tion items. In the event of significant changes to raw materials, manufacturing processes, or standards, or if
Quality Control and
periodic inspections yield non-conformance, the inspection frequency must be immediately changed to
Inspection Management
batch-by-batch inspection. Normal periodic inspection may only be resumed after three consecutive compli-
ant batches.
In the event of significant product quality issues, customer complaints, or failed inspections, the Non-confor-
Non-conformance Correction and mance Correction and Corrective Action Control Procedure shall be initiated. The responsible departments are
Continuous Improvement required to analyze the root cause and implement corrective actions, while the supervising departments shall
monitor and verify these actions until the issue is resolved, to prevent recurrence.
Hengli Petrochemical(Dalian) Hengli Petrochemical Refining
Sustainability Report 2025
Digital Quality Assurance
Case QCC Project Initiatives
Hengli Petrochemical's industrial parks have strengthened quality management through the systematic development of digital
and intelligent systems. Hengli's digital quality management system, centered on the self-developed HENGLINK Industrial
Internet Platform, has enabled end-to-end digitalization across the product life cycle, covering raw material procurement, To further advance quality improvement, efficiency
inbound handling, processing, outbound delivery and customer service. The system supports end-to-end quality traceability, optimization, and cost control within the company,
with clearly defined identification processes, tracking processes and responsibilities across production and operations, forming Jiangsu Kanghui has launched Quality Control Circle
a closed-loop quality control network covering raw materials, production, inspection, warehousing and traceability. (QCC) projects initiatives promoting a culture of
continuous improvement across the organization. These
initiatives operate on a cross-departmental collaboration
Developing an End-to-End Quality Traceability System: model with a six-month cycle, utilizing a three-stage
review mechanism covering project initiation, interim
Through the self-developed platform and a
Enhancing Process Stability Through Digital evaluation, and final closure to ensure effective execu-
unified coding system, the Company has
Twins and APC tion. The Quality Management Center organizes QCC
enabled end-to-end digitalization from raw
project training to provide guidance for the high-quality
materials to customers, ensuring traceability The Company applies digital twin systems for QCC Project Initiation Review Meeting
implementation of these projects.
of quality accountability and rapid identifica- quality simulation and real-time monitoring,
tion of issues. and utilizes Advanced Process Control (APC) to
reduce variability caused by manual opera-
tions. These technologies ensure the stability
of production processes and the consistency
of product quality.
Quality culture construction
The Company places great emphasis on fostering a culture of quality and has organized numerous quality training programs
across its industrial parks to enhance quality management awareness among all employees. New hires undergo training on
corporate culture and quality controls upon joining the Company. Existing employees continuously improve their capabilities
through rotational training and role-based skill training, while management personnel receive training in modern quality
management practices, collectively fostering a strong culture of quality.
Case Specialized Quality Training
During the reporting period, Kanghui New Material
organized a series of specialized quality training to
foster employees' awareness of quality management
and drive improvements in production quality. The
training covered a range of quality management tools,
including APQP, CP and 8D, as well as regulations on
toxic and hazardous substances. These training
Indicators and Targets
effectively enhanced employees' understanding and
Each of Hengli Petrochemical's industrial parks sets annual quality targets based on its operational conditions and systematically
application of these quality tools, established a unified
breaks them down to functional departments, production workshops, and key positions. A routine target monitoring mechanism
working language and standards for quality manage-
also has been established to track the achievement of quality targets on a monthly and quarterly basis, ensuring timely visibility
ment, and consequently improved the company's
APQP Training into performance against objectives.
overall quality management capabilities and production
efficiency.
Sustainability Report 2025
Customer Communication and Satisfaction
Optimizing Customer Service
The Company places a strong emphasis on customer satisfaction management. In accordance with the Customer Satisfaction
Management Procedure, the Company distributes the Customer Satisfaction Survey to customers annually to collect feedback
across dimensions such as product quality, packaging, logistics, and on-time delivery. Following the collection of the survey
Customer Service Management feedback, the Company conducts a systematic analysis of the data to prepare a Customer Satisfaction Survey Report. Based on
the findings, targeted improvement actions are developed and implemented by the responsible departments, forming a
closed-loop process of survey, analysis, improvement, and verification.
The Company adheres to a market-oriented and customer-focused approach and continuously optimizes its customer service
system. The Company has established the Customer Service Control Procedure, implemented comprehensive sales processes The Company has established a clear system for classifying and handling customer complaints. Customer complaints are
and refined after-sales service mechanisms to ensure prompt responses to and resolution of customer complaints and addressed in accordance with the procedures set out in internal policies, including the Customer Service Control Procedure and
feedback. The Company also places a strong emphasis on strictly protecting consumer information security, enhancing custom- the Corrective Action and Continuous Improvement Procedure. For significant quality issues, the Company conducts root cause
er satisfaction, and effectively meeting consumer needs. analysis and implements long-term corrective measures using tools such as the 8D Report, and promptly provides feedback on
the resolution to the customer. This ensures that every complaint is documented, followed up on, and resolved, effectively
addressing customer concerns and safeguarding their rights and interests. During the reporting period, the Company achieved
Customer Service Procedure Framework a 100% resolution rate for customer complaints.
Customer Complaint Handling System Diagram
Customer complaint
Yes
Receive complaint
Salesperson receives the complaint
Confirm delivery status
(check if within contract scope) Customer Complaint Handling Request Form
Customer Satisfaction
Customer Service Control Procedure Contract Review Procedure Management approval
Management Procedure
No
Pre-sales Technical Support Department
Quality Complaint Resolution Process
Analyze and clarify responsibility
Analyze
Non-quality related measurement anomalies Quality-related measurement anomalies
On-site verification Transportation anomalies Customer factors Quality-related measurement Supplier issues
Applicable to the entire process of Applicable to the monitoring and Applicable to the control of anomalies
(third-party issues) (usage/storage) (product/logistics)
product sales and services; measurement of external contract review;
customer satisfaction.
It supports the implementation of It ensures that product-related Formulate a handling plan
If necessary
On-site investigation On-site investigation
the Company's quality policy, Conduct customer satisfaction requirements listed in the contract Customer
assists customers in the proper surveys to determine whether the are clearly defined, comprehen- acknowledgment
On-site investigation report Third-party monitoring
use of our products, promptly Company accurately understands sive, and reasonable. The review
resolves issues that arise during and meets customers' current and should confirm that the Company Implement plan Management approval
Suggested Management
measures approval
product use, and provides future needs and expectations. has the capability to meet such Yes
No
customers with high-quality The Company uses the results of requirements, ultimately ensuring Handling plan
Customer
acknowledgment
products and excellent service to the surveys to improve the QHSE customer satisfaction. Yes
enhance the corporate reputation. management system and
Implement plan
continuously enhance customer
Close the issue and
satisfaction. archive the case
Summarize and archive Continuous improvement
Sustainability Report 2025
Strategy
Upholding Innovation-driven Development
The Company has consistently adhered to an innovation-driven development strategy. Leveraging its specialized R&D platform,
the Company focuses on addressing technological gaps and market pain points in the field of differentiated functional materials,
concentrating its efforts on breakthroughs in cutting-edge technologies and the development of high-end products. Looking
Governance ahead, the Company will prioritize market demand, deepen R&D innovation efforts, and accelerate digital transformation.
Through the existing platform, the Company will explore innovative technologies, optimize production processes and manage-
ment efficiency, and foster new quality productive forces to support sustainability.
Hengli Petrochemical has established and implemented management policies, including the New Product Development
Management Procedure, Laboratory Management Regulations for the New Materials R&D Center, and Reward Management
Measures for Independent Innovation. By addressing multiple dimensions covering the end-to-end R&D process control,
Impact, Risk and Opportunity Management
standardized laboratory operation and incentives for innovative achievements, these policies support a systematic, end-to-end
The Company has established dedicated procedures for managing risks and opportunities in alignment with its production,
innovation management system. The Company has established a specialized R&D organizational structure with clearly defined
operations, and technological innovation processes. By systematically evaluating potential risks and opportunities across the
responsibilities across all layers. Concurrently, it has formulated annual R&D objectives and long-term strategic plans to clarify
entire process, including market planning, project initiation, changes in requirements and pilot production, and promptly imple-
new product development pathways and future technological directions. By steadily enhancing core R&D capabilities and
menting control measures, the Company ensures that its R&D processes remain under control and that its innovation outcomes
independent innovation capacity, the Company provides a solid foundation and strong momentum for high-quality, long-term
are effective. In addition, the Company places a high priority on protecting R&D confidentiality and intellectual property. It has
development.
established a comprehensive confidentiality management and intellectual property protection system, actively encourages and
assists employees in applying for patents and intellectual property, and effectively safeguards the security of core technologies
Key Performance
and innovative achievements.
Innovative Outcomes
Total number of R&D personnel 4,348 Hengli Petrochemical focuses on core market needs and technical bottlenecks in the industry. By establishing an evaluation
system and a reward mechanism for technological innovation, the Company encourages employees to actively participate in the
development of innovation projects. During the reporting period, the Company achieved significant breakthroughs in R&D and
innovation, with several achievements receiving widespread recognition from the government and the industry.
Key Performance
By the end of the reporting period, the Company had 8 national high-tech enterprises, 2 national certified
By age
enterprise technology center, and 3 postdoctoral research workstations.
background
Under 30 years old
Below bachelor degree Master
Aged 30 to 40 (30 included, 40 excluded)
Bachelor Doctor
Aged 40 to 50 (40 included, 50 excluded)
Aged 50 to 60 (50 included, 60 excluded)
Sustainability Report 2025
Case Multiple Achievements were Selected for the "Textile Light" Specialized, Refined, Unique and Innovative List Industry-Academia-Research Cooperation
Hengli Petrochemical continues to deepen comprehensive cooperation with universities and research institutions, establishing
In 2025, Hengli Chemical Fiber and Deli Chemical Fiber were successfully an integrated innovation system that links industry, academia, research, and application. Leveraging its industrial strengths and
recognized for their robust R&D capabilities and outstanding technological R&D capabilities, the Company has established long-term, stable and in-depth strategic partnerships with several leading
innovations, with a total of seven achievements selected for the "Textile domestic universities and research institutions to jointly tackle technical challenges, promote commercialization of research
Light" Specialized, Refined, Unique, and Innovative Enterprises List. outcomes, and cultivate talent. Kanghui New Material, together with 10 entities including Dalian University of Technology,
Shenyang University of Chemical Technology, Dalian University, and the Liaoning Academy of Agricultural Sciences, has jointly
The annual "Textile Light" Specialized, Refined, Unique, and Innovative
established the Liaoning Kanghui Petrochemical New Material Industry-Academia-Research Alliance.
Achievements Selection is jointly organized by the Industry Development
Department of China National Textile and Apparel Council (CNTAC) and
Project Cooperating University Cooperating Entity
the Textile Light Science and Education Foundation. As an authoritative
and benchmark event in the field of technological innovation within the Research on Low-precipitation Modified PBT Resistant to Refrigerant
textile industry, it aims to promote the commercialization of scientific and and Analysis of the Influence of Terminal Carboxyl Groups and Dalian University of Technology Kanghui New Material
technological achievements and collaborative innovation across the indus- Precipitation Amount in PBT Resin
trial chain, thereby injecting new momentum into the high-quality industry Development of new green functional polyester fiber materials
Donghua University Hengke Advanced Materials
development. technology
Development of new modified polyester fiber technology Donghua University Jiangsu Xuanda
Research and development of preparation technology for
Nantong University Hengke Advanced Materials
high and medium hollow polyester fibers
Case Hengke Advanced Materials Successfully Independently Developed "Cool-Warm Fiber"
The development of hyper-realistic and functional
Nantong University Jiangsu Xuanda
polyester fibers
In June 2025, Hengke Advanced Materials achieved a major break-
The application effect and ecological environment impact
through in the field of functional fibers with the successful indepen- Shenyang Agricultural University Kanghui New Material
of PBAT biodegradable mulching film
dent development of a new generation of photothermal fiber,
"Cool-Warm Fiber." Testing and certification by authoritative The development of high-strength and high-rigidity
Shenyang University of Chemical
biodegradable polyester for both injection molding and Kanghui New Material
third-party institutions, including China Textile Standards (Zhejiang) Technology
blown film
Testing Co., Ltd., confirmed that the performance of the fiber has
reached an advanced domestic level. Due to its superior perfor-
mance, excellent dyeing uniformity, and significantly improved Industry Co-creation
processability compared with similar products, the fiber has
The Company actively participates in the development of national standards, leveraging its technical expertise to support the
received high praise from customers and brand partners.
standardized development of the petrochemical industry. It also actively engages in industry exchanges to share advanced
technical concepts and practical achievements, while drawing extensively on the experiences of leading companies within the
sector to drive technological innovation and foster collective progress in the industry.
Participating Entity Standard Type
Case Kanghui New Material achieved a significant breakthrough in the protective base film for polarizing films Kanghui New Material Technology Co., Ltd. Biodegradable mulching film for agricultural uses National standard
Kanghui New Material Technology Co., Ltd. Fibre grade polybutylene terephthalate (PBT) chip Industrial standard
In 2025, Kanghui New Material achieved a significant breakthrough in the protective base film for polarizing films Jiangsu Xuanda Polymer Materials Co., Ltd. Fibre grade polybutylene terephthalate (PBT) chip Industrial standard
through technological innovation. Both production volume and quality have reached advanced industry levels, and
High shrinkage polyester drawn yarn/torque-free polyester drawn
the manufacturing process has met the standards of leading global enterprises. Significant improvements have been Jiangsu Xuanda Polymer Materials Co., Ltd. Industrial standard
textured yarns tri-different combined yarns
made in key product indicators such as heat resistance, defect rate and flatness, successfully breaking the
Kanghui Nantong New Material Technology Co., Ltd. Standard for separator of Sodium-ion battery Group standard
long-standing reliance on imports of the high-end protective base film for polarizing films.
Greenhouse gas emission accounting and reporting requirements:
Kanghui Nantong New Material Technology Co., Ltd. Battery separator enterprises Group standard
Dry-process uniaxial stretching polyolefin separator for Lithium ion
Kanghui Nantong New Material Technology Co., Ltd. Group standard
batteries
Sustainability Report 2025
Participate in industry activities
Case Hengli Chemical Fiber Recognized with National "Excellence-Level Smart Factory"
On September 4, 2025, the Ministry of Industry and Information Technology of the People's Republic of China
released the "List of Excellence-Level Smart Factory Projects 2025." Hengli Chemical Fiber was successfully selected
for the project titled "Flexible Parallel Smart Factory for Multiple Process Segments in Polyester Fiber Production."
The construction of Hengli Chemical Fiber’s smart factory features three key highlights: ensuring operational
independence and controllability; supporting rapid product changeovers; and breaking through the limitations of
existing facilities and equipment to establish a replicable and scalable benchmark for intelligent transformation in
the industry. The implementation of the smart factory has yielded significant results: the CNC and network connec-
The 8th Automotive High-Performance Membrane tivity rates for key equipment have both reached 100%, AI technology is applied in over 26% of production scenari-
Japan High Performance Film Exhibition
Materials Market and Technology (Taizhou) Forum os, production efficiency has increased by 14%, and labor productivity per employee has risen by 15%, achieving a
Digital and Intelligent Construction
The Company has vigorously advanced its "Intelligent Transformation and Digital Transition" strategy, establishing a digital
ecosystem centered on the Henglink Industrial Internet Platform. By integrating intelligent systems such as NCC, MES, AWMS,
AGV, and equipment management, and leveraging data sharing and interaction to break down silos, the Company has achieved Intellectual Property Protection
end-to-end digital control across the entire supply chain—from raw material procurement and manufacturing to sales and
The Company's intellectual property manage- Certification to Intellectual Property Management System
service. This has effectively enhanced quality control, reduced production costs, and improved production efficiency.
ment is led by the general managers of each
During the reporting period,Hengke Advanced Materials, Hengli Chemical Fiber, and Deli Chemical Fiber were all awarded the industrial park, promoting efficient collaboration
title of "Advanced Smart Factory" of Jiangsu Province; Hengli Chemical Fibers received the national "Excellence-Level Smart and coordinated efforts across all departments.
Factory" honor; and Kanghui Nantong was successfully designated a national "5G Factory." The Company has established a series of
policies, including the Intellectual Property
Kanghui Nantong was selected for the list of "5G Factory" 2025 by the Ministry of Industry and Manual, Procedures for Acquiring Intellectual
Case
Information Technology Property, Procedures for Maintaining Intellectual
Property, and Procedures for Managing Intellec-
In 2025, Kanghui Nantong's "Full-Link Cloud-Based Collaborative 5G Smart Manufacturing Plant for Functional Films"
tual Property Risks, to advance the application
was selected for the Ministry of Industry and Information Technology of the People's Republic of China's the list of "5G
and protection of the Company's intellectual
Factory" 2025. The factory has achieved comprehensive connectivity across equipment, production lines, workshops,
property. The Company closely monitors
and the entire facility, significantly enhancing data transmission speed and stability. Leveraging the low-latency
industry and market trends, strictly mitigates
capabilities of 5G, sensor data from production lines is transmitted instantly to the control system, enabling rapid
intellectual property risks, and ensures that
response to anomalies, automatic adjustment of production parameters, or the issuance of alerts, thereby effectively
Company's business operations do not infringe
reducing production downtime.
upon the intellectual property rights of others.
The Company is advancing its certification of an
intellectual property management system, with
each industrial park actively pursuing applica-
tions and maintenance efforts. During the
reporting period, Jiangsu Kanghui was awarded
the honorary title of "2024 Benchmark Enterprise
for Pre-examination Volume and Quality" by the Hengke Advanced Materials Kanghui Nantong
Suzhou Intellectual Property Protection Center.
Sustainability Report 2025
Case Several Subsidiaries Recognized with National-level Intellectual Property Honors
Strengthening Information Security
Risk Management
The Company has consistently prioritized innovation as
Hengli Petrochemical has established the Information Security Management System and formed an Information Security Leader-
its guiding principle, leveraging its strong independent
ship Group to implement standardized end-to-end oversight of the Company's information systems, infrastructure and software
R&D capabilities, comprehensive intellectual property
operations, thereby effectively safeguarding the Company's trade secrets and the privacy of stakeholders, including customers
protection framework, efficient technology commer-
and suppliers. The Company has also developed the Cybersecurity Emergency Response Plan and conducts regular emergency
cialization capabilities, and standardized management
drills to enhance all employees' capabilities in preventing information security risks and handling emergencies. By upholding
systems. Hengli Chemical Fiber and Hengke Advanced
accountability, the Company builds a robust digital security barrier and fosters trust and accountability.
Materials, its subsidiaries, have been successively
recognized as "National Intellectual Property Demon-
stration Enterprise," while Deli Chemical Fiber and Information Security Organizational Structure Key Performance
Kanghui New Material have been awarded the title of
"National Intellectual Property Advantage Enterprises." During the reporting period, the
Responsible for the security
Information Security
These honors fully demonstrate the Company's strong Working Group
and privacy protection of
Company did not experience any
entry information
capacity for independent innovation and its compre- Information Security
violations of information security and
hensive strength in core technologies. Leading Group
privacy protection regulations.
Emergency Response Handle and analyze
Group information security incidents
Information Security Risk Management
Indicators and Targets
The Company has established a comprehensive information security risk assessment system that identifies potential threats
The Company has consistently focused on high-end functional materials that are urgently needed for national strategic purpos- through regular scans and vulnerability testing, and implements targeted protective measures. The Company enforces a data
es and has long been heavily reliant on imports. The Company has proactively invested in the R&D of cutting-edge materials classification management system, encrypting the storage and transmission of sensitive information, and deploying advanced
technologies while simultaneously developing environmentally friendly products, thereby driving the industry's accelerated technologies such as firewalls and intrusion detection systems to build a multi-layered security network. Additionally, the
transformation toward high-end, more environmentally friendly, and more intelligent development. Company has established policies such as the Cybersecurity Emergency Response Plan to standardize the procedures for
handling security incidents within the Company's information systems. The Company conducts regular drills and provides
information security training to employees to enhance their ability to prevent and control information security incidents.
Key Performance Information Security Management Measures
The Company has established a series of management measures focused on physical security and cybersecurity to continuously
improve the capabilities of network and data protection. During the reporting period, the Company collaborated with external
During the reporting period, the Company's R&D investment totaled 1,626 million yuan, representing specialized firms to conduct penetration testing and other services, performing comprehensive security vulnerability scans and
simulated attacks across various servers. These practical tests were used to assess the effectiveness of system defenses, and
The Company has obtained a total of 2,039 patents, including 977 granted invention patents, Physical Security Control
Strengthening the security management of the physical environment, including the security guarantee of computer rooms,
uninterruptible power supplies for hardware equipment, etc.
Strengthening cybersecurity management, including security guarantees such as network architecture and firewall intrusion
detection.
Information Strengthening the security management of information, including security guarantees such as data encryption, backup and
Security Control recovery.
Application Security Strengthening the security guarantee of application systems, including the secure configuration of operating systems and the
Control secure management of databases, etc.
Strengthening the access authority management, including the security safeguards for permissions corresponding to
Personnel Access Control
employees' onboarding and departure.
Sustainability Report 2025
Sustainable Supply Chain Responsible Procurement
Hengli Petrochemical has signed an Anti-Bribery Agreement with its suppliers to establish robust safeguards against integrity
risks at the source of its business operations and to optimize and refine the terms related to contract performance. The Compa-
With a strong sense of responsibility and commitment, Hengli Petrochemical places high priority on building a secure supply ny has conducted specialized integrity training for personnel in key positions, guiding procurement staff to maintain ethical
chain. Grounded in integrity and guided by the goal of mutual benefit, the Company works with all suppliers in unity to foster a interactions with suppliers and ensuring that they fulfill their duties comprehensively in accordance with laws and regulations.
long-term, stable, and mutually trusting partnership ecosystem. The Company has established a series of policies, including the
Supplier Management Measures and the Supply Chain Risk Management Measures, to ensure that the supply chain system
operates in a standardized, efficient, stable, and controllable manner. Additionally, we have developed a digital supply chain Bidding and procurement process
management platform to enable real-time sharing and dynamic monitoring of critical data—such as supplier information,
procurement plans, and logistics distribution—thereby continuously improving supply chain coordination efficiency and risk
In each stage of the bidding and All personnel involved in procurement All technologies, patents and business
prevention capabilities. procurement process, each judge must must adhere to professional ethics and quotations involved in the bidding and
participate independently, and techni- maintain integrity and self-discipline. procurement assessment must be confi-
Supplier Management cal and commercial judges must con-
duct their assessments in separate
dential.
phases.
Suppliers will be evaluated based on criteria such as production management
and quality control, product performance, and HSE management capabilities, and
Admission of Suppliers Principle of Principle of Principle of
certification of quality, environmental, and safety management systems will be a
checks and integrity and commercial
key factor in supplier qualification.
balances discipline confidentiality
Review the qualification documents submitted by suppliers of different categories Principle of Principle of Principle of
Supplier Audit as required; where necessary, conduct on-site inspections and subsequently openness and reputation traceable
issue a Supplier Investigation Report and a Supplier Score Sheet. transparency safeguarding procedures
Assess and re-assess suppliers, and enter the supplier assessment results into the
Supplier Assessment supplier information database. The assessment criteria for bidding All relevant participants in each Each step in the bidding and
and procurement must be fair and stage of the bidding and procure- procurement process has stan-
Suppliers will be evaluated based on their capabilities, product quality, and consistent, and the conclusion ment process should be conscien- dardized outcome records and
must be objective and impartial. tious, professional and honest to documents for review.
delivery performance, and will be classified into tiers based on their scores.
safeguard the enterprise's reputa-
Procurement volumes may be increased for Grade A suppliers; procurement will tion.
Supplier Categorization
proceed as normal for Grade B suppliers; Grade C suppliers will require guidance,
and procurement volumes may be reduced or suspended; Grade D suppliers are
deemed unqualified and will be eliminated.
Establish an appropriate supplier exit mechanism; if there are serious issues or Equal treatment to small and medium-sized enterprises
Supplier Exit legal disputes with contract performance, the supplier should be removed from
the list of qualified suppliers and its supplier status revoked. The Company is committed to building a supply chain ecosystem that will benefit all parties involved. The Company is committed
to upholding the principles of fairness and impartiality, treating all partners equally. The Company maintains consistent
standards in areas such as partner admission, resource allocation, and operational support. By streamlining payment processes,
In addition, guided by the principles of green development, the Company is actively promoting the development of a green we mitigate the financial pressure on small and medium-sized enterprises (SMEs) and provide technical support and training to
supply chain. During the supplier selection process, it gives priority to environmentally friendly partners and regularly conducts help them improve their competitiveness. The Company has developed transparent procurement and partnership mechanisms
supplier engagement and training to continuously improve the sustainability of the supply chain. to ensure that SMEs have equal opportunities throughout the bidding, contract execution, and contract performance.
Sustainability Report 2025
Chemical Safety Key Performance
During the reporting period, a total of 3,606 chemical emergency drills were conducted.
In chemical safety management, Hengli Petrochemical consistently balances compliance with safe production, upholding
compliance standards and strengthening safety measures. The Company is fully committed to safeguarding the lives of its
employees and mitigating all types of chemical safety risks, while also strictly controlling environmental hazards. By standardiz-
ing the management of chemicals throughout the entire process, the Company protects the ecological environment surrounding
its facilities, thereby achieving the coordinated development of safety, compliance, and environmental protection.
Case Emergency Drill for Tetrahydrofuran Leakage of Kanghui New Material
Chemical Management System In June 2025, Kanghui New Material organized a specialized emergency response drill for tetrahydrofuran
leakage. During the drill, personnel from all departments responded swiftly upon receiving the alarm and carried
The Company has established the Chemical Safety Management Policy to strictly regulate the procurement, storage, use, and out response procedures in an orderly manner in accordance with the emergency plan. The drill effectively tested
disposal of chemicals. Each industrial park has developed a hazardous chemical management mechanism tailored to its specific the practicality and effectiveness of the tetrahydrofuran leakage emergency response plan, enhanced employees'
circumstances. The Board of Directors, as the body with ultimate responsibility for chemical safety management, provides overall safety awareness and emergency response capabilities, and provided valuable experience for handling similar
leadership and coordination; the Strategy and Sustainability Committee is responsible for formulating, promoting, and oversee- incidents in the future.
ing the implementation of relevant policies and regulations, and the Safety and Environmental Protection Department leads the
implementation of specific measures and regularly reports progress and results to higher authorities.
Chemical Management Strategy
The Company thoroughly implements the safety policy of "safety first, prevention-oriented, and comprehensive management,"
and diligently carries out all aspects of chemical safety management with meticulous attention to detail. The Company has
reinforced its primary responsibility for production safety, breaking down organizational silos across departments and industrial
parks to develop a chemical safety accountability system with full horizontal and vertical coverage. The Company strictly imple-
ments a dual-prevention mechanism combining risk classification control with hazard identification and rectification. It regularly
conducts comprehensive chemical safety risk assessments to accurately identify potential risks at every stage, including
procurement, transportation, storage, use and disposal. Additionally, the Company classifies these risks by level, develops a
dynamic risk inventory, and develops specialized control measures for high-risk chemicals.
Impacts, Risks and Opportunities Management
The Company conducts regular chemical risk assessments to accurately identify potential risks and performs internal audits on
the compliance and effectiveness of chemical management to ensure the safe use of chemicals. Each industrial park has estab-
lished comprehensive and specialized emergency response plans for chemicals, including the Emergency Response Plan for
Hazardous Chemical Leaks, thereby establishing a complete system of response plans to standardize emergency response
procedures for chemicals. These plans are regularly tested through leakage response drills to validate their effectiveness.
The emergency drill site for tetrahydrofuran leakage of Kanghui New Material
Sustainability Report 2025
Full Lifecycle Management of Chemicals Management of Restricted Substances
The Company has established clear management requirements for the procurement, transportation, production, storage, use, The Company continuously pays attention to and tracks developments in chemical regulations both at home and abroad. We
and waste disposal of chemicals to standardize employee operations, thereby effectively mitigating chemical-related risks. strictly follow domestic laws and regulations, including the Law of the People's Republic of China on Work Safety, the Regulations
for the Safety Management of Hazardous Chemicals, the Regulations on the Administration of Precursor Chemicals, and the
Measures for the Public Security Management of Explosives Precursors, as well as international standards and customer require-
Chemical Safety Management Measures
ments such as the EU REACH Regulation, POPs Regulation, the U.S. EPA's List of Hazardous Substances, and the SVHC List.
Based on this, the Company conducts systematic identification and risk assessments of chemicals involved throughout the entire
To ensure a legitimate procurement process, strict control is required over the process to guarantee that proper channels are
process—from material procurement to manufacturing—to ensure full compliance and continuously improve safety manage-
followed and all documentation is complete. For precursor chemicals and explosives precursors, the Procurement Department
ment standards.
Procurement
is responsible for providing necessary materials in advance, and the Safety and Environmental Protection Department must
The Company has completed the registration and filing of information regarding all chemical categories, production and import
complete the filing with public security authorities prior to purchase.
volumes on platforms such as the Comprehensive Registration Service System for Hazardous Chemicals, the Management
Service Platform for Precursor Chemicals, and the Chemical Registration System. At the same time, the Company fully discloses
Focus on controlling dynamic logistics risks and standardizing loading/unloading practices. We verify the qualifications of
the product names, corresponding regulatory requirements, and intended uses for all chemicals and products involving
Transportation transportation units and vehicles, assign dedicated personnel to supervise loading/unloading, and enforce SOPs such as
Substances of Very High Concern (SVHC), ensuring that no banned or restricted substances are used. This approach achieves
anti-static measures and flow rate control to ensure operational safety.
comprehensive coverage, high transparency, and strict compliance in chemical management, thereby effectively ensuring the
ability to comprehensively control chemical safety risks.
Establish and refine safety operating procedures while ensuring hazard communication and personnel training. Signs warning
Production of potential hazards are installed at work sites. These signs are accompanied by safety facilities, including systems designed to
Key Performance
prevent fires and explosions, as well as alarms that detect combustible and toxic gases.
During the reporting period, the Company's coverage rate of identification and supervision of the chemicals used
Implement a storage system that is categorized and zoned, enforcing the segregation of incompatible chemicals. We adhere
Storage
to the "Four Strict Prohibitions" when it comes to specially controlled hazardous chemicals, and we implement the "Six Denials
of Warehouse Entry" protocol for warehouse receiving. Chemicals classified as highly toxic are managed in accordance with the
reached 100%.
stringent "Five Pairs" protocol. All of the Company's products (including existing products and newly developed products) do not involve the use
Strict compliance with regulations on chemical hazardous waste disposal is mandatory, and qualified third parties must be of any prohibited substances.
Disposal
commissioned for compliant treatment and disposal.
The Company complies with all applicable laws and regulations, including the Measures for the Registration and Management of
Hazardous Chemicals and the Regulations on the Safety Management of Hazardous Chemicals. We conduct comprehensive
surveys of all hazardous chemicals, establish unified management archives, and complete registration with local work safety
supervision and administration departments as legally required. Building on this foundation, the Company continuously enhanc-
es safety operating procedures across all stages—production, use, storage, distribution, and transportation—and proactively
accepts regulatory oversight to ensure compliant operations. For other chemicals, we conduct risk identification and assessment
per regulatory mandates, establish dedicated management records, and implement systematic compliance controls to effective-
ly safeguard personnel, property, and the environment.
The Company performs a "Chemical Safety Status Assessment" every three years. This assessment covers all chemicals in use and
identifies their types and hazard characteristics. It also updates the management ledger. Additionally, we commission qualified
third-party institutes to prepare Safety Data Sheets (SDS) for all products and intermediates. These are published via the nation-
al "Comprehensive Registration Service System for Hazardous Chemicals" and the big data platforms for the prevention and
control of hazardous chemical risks in the regions where our subsidiaries operate. For all externally procured raw materials and
chemical agents, we proactively request compliant SDS from suppliers. This ensures the full traceability and controllability of
chemical information across the supply chain.
Sustainability Report 2025
Chemical Phase-out and Substitution Indicators and Targets
The Company prioritizes control at the source and systematically advances chemical phase-out and substitution with a The Company has deeply integrated chemical safety management into its environmental protection and production safety
forward-looking perspective. In compliance with national and local regulations—such as the Catalog of Backward Work Safety systems, adhering to the principles of synergizing safety and environmental protection and unifying risk management with
Production Processes and Equipment of Hazardous Chemicals to Be Phased Out (First Batch)—and informed by internal hazard compliance. It has incorporated chemical safety indicators into its HSE management system, implementing unified planning,
assessments, we have established and continuously update our Chemical Phase-Out List, with clearly defined control pathways deployment and evaluation to achieve deep integration and coordinated management of chemical safety with environmental
and timelines. We actively promote chemical substitution processes, systematically evaluating and prioritizing safer chemicals, protection and safety operations. In 2025, the Company reported no chemical leakage incidents.
biologics, or green raw materials to gradually reduce reliance on chemicals of concern. The Company has formulated a medium
As of the end of the reporting period, Hengli Chemical Fiber, Hengke Advanced Materials, Jiangsu Xuanda and Kanghui New
to long-term substitution plan, committing to phasing out all chemicals of concern in the future, thereby reducing safety and
Material had obtained REACH certification. This certification is based on the requirements of the EU's Registration, Evaluation,
environmental risks at the source and driving the green and sustainable transformation of production processes.
Authorization, and Restriction of Chemicals (REACH) regulation, ensuring that the Company's products do not pose a risk to
human health or the environment during production, use, and disposal. Hengli Chemical Fiber, Hengke Advanced Materials and
Jiangsu Xuanda have also obtained OEKO-TEX STANDARD 100 certification, which tests the ecological safety of textiles to
ensure that products do not contain harmful substances.
Chemical Substitution Measures
We are advancing a chemical reduction plan for arsenic trioxide by replacing traditional laboratory
analysis with gas chromatography, thereby eliminating the use of hazardous chemicals such as sulfuric
acid, hydrogen peroxide, and arsenic trioxide. We have obtained multiple sets of test data during the
reporting period and will continue to expand this initiative in the future.
We continue to promote the adoption of green processes, replacing traditional glycerin with
high-boiling-point plasticizers for starch plasticization to produce smoke-free, biodegradable
starch-modified materials. This reduces chemical use at the source and improves resource utilization
efficiency.
REACH Certification for Hengke REACH Certification for Hengli
Advanced Materials Chemical Fiber
People-oriented,
Building a Responsible Future Together
·Employee Rights and Benefits ·Production Safety ·Rural Revitalization
·Employee Growth ·Social Welfare
SDGs
People-oriented and walking together with love. Hengli Petrochemical integrates employee care into all the details, legally
safeguarding their rights and interests, listening to their voices, supporting their growth and development, and encouraging
them to realize their self-worth in their roles. Driven by gratitude, we give back to society. The Company remains deeply commit-
ted to public welfare, spreading warmth and empowering strength through concrete actions, ensuring that the Company's
corporate care benefits not only its employees but also reaches every corner of society in need.
Sustainability Report 2025
Key Performance
Employee Rights and Benefits
Total Number of Employees 37,368
Recruitment and Employment
The Company places a high priority on talent acquisition and the protection of employee rights. To that end, it has established
a comprehensive institutional framework, covering recruitment, compensation and benefits, and career advancement. We 1,190 11 284
attract talent through diverse channels, including campus recruitment, external recruitment, employee referrals, and school-en- 2,236
terprise cooperation. We adhere to the principles of fairness, impartiality, and transparency in our hiring practices. We are 234 6,415
committed to ensuring a diverse and inclusive environment and do not discriminate against any job applicant based on gender, 7,177
age, religious beliefs, or race. We provide employment opportunities for people with disabilities, veterans, and ethnic minorities,
and strictly prohibit the employment of child labor. By Function
Background
Production Finance Doctor Bachelor
Sales Administration Master Junior College Degree and Below
Technology Others
Compensation and Benefits
The Company offers employees market-competitive compensation and has established a robust grievance mechanism for
performance evaluations. The Company adheres to the principle of "distribution according to work," ensuring that employees
receive fair and equitable compensation. The Company has established a four-tier performance management system, continu-
Scene of the campus presentation Recruitment site for veterans ously standardizing performance management processes and conducting regular performance evaluations. The results of these
evaluations play a key role in the distribution of performance bonuses and the selection of outstanding employees, fully leverag-
ing the motivational role of the compensation system in attracting and retaining talent. The Company places significant empha-
sis on performance communication and feedback, having implemented a "two-way communication" process between managers
and employees to ensure the fairness and objectivity of evaluation results.
Key Performance
Performance Appeal Mechanism
During the reporting period, the Company employed 35 employees with disabilities, 713 veterans, and Each month, the department
publicly announces all
Should an employee have any
objections to the evaluation
If the employee still has
objections after communicating
The Human Resources
Department will consult with
performance evaluation results, they are entitled to with the department head, they the department head, consider
results, recognizing appeal by speaking with their may submit feedback or file a their opinions, and report to
employees with outstanding department head. written appeal to the Human the Company's management
performance and Resources Department through before making a final decision
communicating corrective various channels, including on whether to amend the
measures and improvement email, suggestion boxes, the assessment results.
plans with employees whose official WeChat account, and the
performance needs labor union.
improvement.
Sustainability Report 2025
Hengli Petrochemical offers comprehensive and favorable benefits to all employees, including but not limited to five social
insurances and one housing fund, company-paid leave, cultural and recreational activities, and the Employee Stock Ownership
Employee Care
Plan. The Company actively enriches employees' cultural lives, consistently attends to the needs of employees facing financial At Hengli Petrochemical, we recognize our employees as the cornerstone of our organization. We are dedicated to developing
hardships, and is committed to enhancing employee well-being and satisfaction. a comprehensive and supportive employee welfare program. The Company prioritizes the well-being of its employees, offering
benefits that support their physical and mental health, career advancement, living expenses, and special groups. These
Benefits System initiatives aim to foster a sense of belonging, fulfillment, and happiness among employees across all aspects of their lives. Hengli
Petrochemical's subsidiaries are committed to enhancing their support services. Employee dormitories are equipped with air
conditioning and internet access, while residential areas feature amenities such as basketball courts, reading rooms, and super-
Five Social Insurances and One Overtime Compensation Hardship Mutual Aid Fund and
markets. The Company also offers a variety of benefits, including birthday gifts, festival gifts, and high-temperature allowances.
Housing Fund Employee Support Program
Annual Health Check-up The Company has enriched employees' leisure time and strengthened team cohesion through diverse cultural and recreational
Parental Leave, Care Leave, and Free Shuttle Service activities, such as basketball tournaments and variety shows. These activities ensure that every employee can work happily and
Employee Activity Center and live contentedly within the Hengli family.
Others
Cultural & Sports Events Employee Stock Ownership Plan
Statutory Holidays Benefits Employee Activities
Key Performance
During the reporting period, the social insurance coverage rate was 98.16%, the labor contract signing rate
was
Trendy Toy Fair Employee Basketball Game Visit to the Memorial Hall
Democracy and Communication
The Company adheres to the principle of "people-oriented, collaborative governance and development," emphasizing the
importance of employees' democratic rights and their ability to voice concerns. It is dedicated to fostering harmonious and
transparent labor relations. In terms of democratic management, the Company strictly complies with national laws and regula-
tions, establishing and improving a corporate democratic management system centered around the Employee Representative Music and Ideological and Political Dragon Boat Festival Garden Party Sports Day
Congress (ERC). This ensures that employees legally enjoy the rights to information, participation, expression, and supervision.
By utilizing platforms such as the ERC and trade union organizations, employees are enabled to actively participate in major Course and the Awards Ceremony
company decisions, compensation and benefits adjustments, and other matters directly affecting their interests. Such practices
facilitate scientific and democratic decision-making within the enterprise. During the reporting period, Hengke New Materials
and Hengli Chemical Fiber reviewed multiple core policies through the ERC and completed the public disclosure procedures,
effectively safeguarding employees' rights to information, participation, and oversight.
The Company has established a diverse and comprehensive set of communication channels. Each industrial park has established
In addition, we provide female employees with benefits such as prenatal checkup leave, maternity leave, and breastfeeding
a variety of communication channels to meet their specific needs, including dedicated feedback hotlines, email addresses,
leave. We have established a mother-and-baby care room and organized special events for International Women's Day. We also
physical mailboxes, online forums, and other channels. We foster an open and inclusive communication environment by organiz-
arrange for female employees to receive the HPV vaccine, among other initiatives designed to support their well-being.
ing departmental team-building activities, cross-team events, corporate culture seminars, and skills training sessions.
Sustainability Report 2025
Case "Hengmei: Her Power" series of activities Employee Growth
In anticipation of International Women's Day 2025, Hengli (Huizhou) Industrial Park organized the "Hengmei:
Her Power" series of themed activities and extended festive greetings. During the event, the subsidiary invited
Employee Training
medical institutions to provide thoughtful services for female employees, including dental health checkups and Hengli Petrochemical adheres to a "people-oriented" talent development philosophy and emphasizes the development and
specialized breast screenings. Furthermore, it meticulously planned interactive craft-making sessions, enabling refinement of its talent management system, with the objective of building a highly efficient and cohesive team that is united in
female employees to express their creativity and collaborate with one another in a tranquil and convivial purpose and works in concert, thereby achieving mutual growth for both employees and the enterprise. Each subsidiary has
environment, culminating in numerous heartwarming and aesthetically pleasing handmade creations. developed a customized training management system to meet its distinct talent development requirements, progressively
establishing a systematic and standardized framework for employee training management. The Hengli (Dalian Changxing
Island) Industrial Park has established a dedicated training center and practical training base. It has formulated a series of
training management regulations, including the Measures for the Management of Practical Training Bases, Measures for the
Management of Training Center Instructors, and Measures for the Management of New Employee Training at the Training Center.
The subsidiary has systematically upgraded and improved its core training management systems, established a company-level
talent reserve pool, and developed a diversified curriculum resource system. These efforts have established institutional
safeguards for the standardized, normalized, and professionalized delivery of employee training.
We prioritize the cultivation of a robust corporate culture, with a focus on enhancing employee
belonging and satisfaction. Each subsidiary has established training policies and objectives
tailored to its organizational structure and talent needs, providing new hires with systematic
onboarding training. This approach ensures that new employees quickly integrate into the
company culture and become familiar with the company's policies, procedures, and job responsi-
New Employee Training bilities as soon as possible, laying a solid foundation for their future career development.
We prioritize long-term talent development and have implemented a comprehensive training
system that covers all employees. In accordance with our annual training plan, we leverage online
platforms such as the Hengli Business School and LINK Classroom, while drawing on our in-house
trainer system and training resource library, to conduct extensive employee training tailored by
Regular Training level, category, and position, thereby fostering mutual growth between employees and the
company.
Sustainability Report 2025
Furthermore, the Company has developed the "Hengli Classroom" online learning platform, which provides critical digital
Implementation of Key Training Programs - Hengli (Dalian Changxing Island) Industrial Park
support for the Company's internal training system. It is widely used for new employee onboarding, various job-specific skills
training, HSE-focused training, and management development programs. The platform offers a wealth of course resources,
integrating systematic curricula developed by various industrial parks. The content encompasses a wide range of subjects,
including technical operations, safety management, quality management, office skills, and professional ethics, thus catering to
Hengli (Dalian Changxing Island) Industrial Park employees' diverse learning requirements.
organized new graduates, interns, and mid-career
hires to participate in new employee orientation and Online learning platform
new employee boot camps. These programs help new
hires quickly familiarize themselves with the work
environment, strengthen team cohesion, and foster
teamwork. During the reporting period, a total of 108
new employee orientation sessions were conducted,
reaching 2,005 participants; six new employee boot
camps were organized, with a cumulative total of 438 Graduation ceremony for new employees
participants.
The Hengli (Dalian Changxing Island) Industrial Park has developed systematic rotational training
programs for employees at different levels and across various departments. These programs were devel-
oped based on comprehensive training needs surveys. By optimizing end-to-end organizational manage-
ment, the park has effectively enhanced employees' overall competence and job-specific skills, achieving
full coverage of rotational training. In addition, the industrial park is committed to advancing informa-
tion-based management and digital teaching initiatives. It promotes the use of the HENGLINK and HSE
online training platforms, which enable employees to independently schedule training and provide
feedback on their learning outcomes. During the reporting period, various departments within the indus-
trial park conducted a total of 675 systematic rotational training sessions, with 8,228 participants. Further-
more, over 100 training sessions focused on enhancing management skills were conducted for middle
managers, with a total of 1,759 participants.
Key Performance Unit 2025
Total Number of Employee Training Sessions Time 25,669
Total Number of Employees Trained Person-time 506,376
Total Duration of Employee Training Hour 322,700
Operational Training Leadership Training
Average Training Hours Per Employee Hour 8.64
Sustainability Report 2025
Support Employee Development Employee Promotion
Hengli Petrochemical places significant emphasis on cultivating employees' personal qualities and fostering their career devel- Hengli Petrochemical consistently adheres to the principles of "openness, fairness, and impartiality" in the scientific management
opment. The Company fosters an environment conducive to ongoing professional development, recognizing the value of of employee career development and has established a systematic career management system. The Company complies with
enhancing skills and academic qualifications. It actively promotes an organizational culture of learning and growth. The Compa- relevant laws and regulations and has formulated a series of policies, including the Management Measures for the Promotion of
ny and its subsidiaries collaborate with numerous universities to provide employees with pathways for academic advancement. Frontline Employees, Management Measures for the Selection of Team Leaders and Above, Management Measures for Internal
These pathways include programs for associate-to-bachelor's degree conversion, high school-to-associate degree programs, Job Transfers, and the Specific Training Plan for Reserve Cadres. By adopting a dual-track development model that combines
and part-time graduate programs. At the same time, the Company encourages its employees to participate in professional title "management tracks" with "technical/professional tracks," and integrating a range of talent development programs, specialized
evaluations and certification processes and provides the necessary training resources. incentive schemes, comprehensive performance appraisal systems, and promotion and grading systems, the company has
created clear and diversified career development paths for its employees.
Case Supporting Employees' Academic Advancement
Technical/Professional Track (Using
During the reporting period, the Hengli (Dalian Changxing Island) Industrial Park proactively engaged with Management Track
Manufacturing as an Example)
several local universities, facilitating the enrollment of nearly 100 employees in academic upgrading programs.
These programs offered opportunities to enhance qualifications, ranging from associate to bachelor's degrees
and from high school diplomas to associate degrees. The industrial park also collaborated with Dalian Universi-
ty of Technology to facilitate enrollment for part-time graduate programs, with a total of nearly 40 employees Department Manager Higher-level Management Positions
actively participating. It also offered incentives and promotional opportunities to employees who obtained
professional certifications, encouraging their participation in related training and assessments. In December
Workshop Manager
with 220 employees participating. Of these, the first group of 66 successfully passed both the theoretical exam
and the practical assessment, earning the Senior Technician qualification.
Director
Engineer
Class President Senior Employee
Senior Operator Star-level Employee
General Employee
Star-level Operator
Operator
Professional qualification assessment
Sustainability Report 2025
Production Safety Safeguard Production Safety
Safety Management System On-site Safety Management
Hengli Petrochemical has always adhered to the principle of "safety first, prevention-oriented, and comprehensive manage- Hengli Petrochemical's industrial parks regard on-site safety management as the first line of defense in ensuring the seamless
ment," prioritizing the safety and occupational health of its employees above all else. The Company complies with laws and operation of production activities and the prevention of accidents. Guided by the principle of "safety first, prevention crucial, and
regulations such as the Law of the People's Republic of China on Work Safety and the Law of the People's Republic of China on comprehensive management," the Company has established a comprehensive on-site safety control system. This system is
Prevention and Control of Occupational Diseases, continuously improving its safety management system by formulating the supported by systematic regulations, standardized operating procedures, strengthened behavioral management, and technical
Work Safety Reward and Punishment System, Fire Safety Management System, and Regulations on the Responsibility System for monitoring measures.
the Prevention and Control of Occupational Hazards, among other regulations and operational guidelines. It has established a
Work Safety Committee and specialized safety management bodies, creating a top-down safety management framework with
clearly defined responsibilities at every level. Additionally, the company ensures accountability for work safety by directly linking
A strict permit approval and full-process supervision system is implemented for all on-site opera-
safety assessment results to executive compensation and requiring all employees to sign the Safety Responsibility Agreement.
tions, particularly high-risk special operations. A comprehensive Work Permit Management System
has been established to standardize requirements for special operations, such as Hot Work,
Key Performance confined space entry, work at heights, lifting operations, temporary electrical work, excavation,
blind flange operations, and road closure operations. Prior to commencing any operation, a risk
During the reporting period, the proportion of the Company's major manufacturing subsidiaries obtaining the ISO Work Permit Management analysis and safety technical disclosure must be conducted, safety measures such as energy
By issuing safety notices and prohibitions, the Company regulates and enforces safety protocols
ISO 45001:2018 Occupational Health and Safety Management System Certification (Partial) and personal protective measures for on-site personnel. The Company has established the
Management Measures on Preventing the "Three Violations" in Work Safety, which strictly prohibits
and rectifies behaviors such as issuing commands against regulations, forcing workers to perform
Personnel Behavior operations under unsafe conditions, and violating operating procedures.
Management
Key Performance
During the reporting period, the certification rate for special operations personnel and special equipment operators
reached 100%; the employee physical examination coverage rate reached 100%; and zero major work
safety accidents occurred.
Kanghui Dalian New Material Hengli Petrochemical Refining Hengli Petrochemical (Huizhou)
Sustainability Report 2025
Safety Risk Management Case Safety Emergency Drills
Kanghui Nantong actively conducted emergency drills, which included demonstrations of on-site emergency
Safety Hazard Investigation response protocols in the event of sudden incidents, as well as fire rescue training scenarios conducted by the fire
brigade in the coating workshop office area. This drill involved fire departments from three major industrial parks,
featured broad participation, and covered a comprehensive range of scenarios. It effectively fostered a positive
Hengli Petrochemical's various industrial parks continue to deepen the dual-prevention mechanism of graded safety risk control atmosphere where "everyone is emergency-ready," helping to build a safety-conscious team free of safety
and potential hazard identification and rectification. They dynamically adjust the list of graded safety risk controls and have violations, potential hazards, and accidents.
formulated the Measures for the Management of Potential Hazard Identification and Rectification, establishing a risk identifica-
tion and hazard screening system that covers all employees, all processes, and all areas.
The Company employs standard risk identification and analysis methods such as QAR, HAZOP, SIL, JHA, SCL, and LOPA. In
accordance with regulatory requirements, it organizes workshops annually to conduct risk identification activities, compiles a
company-wide annual safety risk identification and assessment report, and creates four-color risk maps for inherent risks and
residual risks based on the assessment results. Concurrently, the Company compiles a list of major and unacceptable risks at the
corporate level, develops management measures for these risks, and develops and promulgates corresponding management
protocols to ensure that risks within the industrial park remain under control.
Case "Snap and Report Hazards" Campaign
To enhance employees' awareness of potential hazards and inspection
capabilities, Hengli Petrochemical's industrial parks have launched the
"Snap and Report Hazards" campaign. This initiative encourages
employees to conduct routine inspections of key areas—such as
production workshops and hazardous waste storage zones—focusing
on hazardous waste storage, fire protection facilities, and emergency
response protocols. Upon identifying hazards, employees are encour-
aged to promptly take photos, upload them, and submit recommenda-
tions for corrective action. This approach aims to integrate hazard
screening into daily operations and establish a long-term mechanism
"Snap and Report Hazards" Campaign
for workplace safety that involves everyone.
Safety Emergency Management
Key Performance Unit 2025
Hengli Petrochemical and its various industrial parks have established a systematic, multi-tiered emergency management
system. They have developed specialized emergency response plans for critical processes such as production, storage, and
transportation, and regularly review and revise these plans to ensure their soundness and practicality. In the event of a work Potential hazard screening and rectification rate % 100
safety incident, the Company immediately activates its emergency response mechanism. In strict accordance with regulations
including the Regulations on the Reporting, Investigation, and Handling of Production Safety Accidents and the Provisions on Safety emergency drills Session 4,343
Administrative Fines for Production Safety Accidents, the Company reports the incident immediately, organizes response efforts,
and initiates accident investigation procedures. Adhering to the "Four Let-Ups" principle (referring to leaving no cause unidenti-
Number of safety administrators Person 533
fied, no responsible person unpenalized, no corrective measure unimplemented, and no educational lesson unlearned), the
Company conducts root cause analysis, determines accountability, implements corrective measures, and provides education.
Additionally, during the annual Production Safety Month and Fire Safety Awareness Month, the Company conducts comprehen- Investment in production safety Million yuan 554
sive multi-scenario drills in collaboration with fire, emergency, and environmental protection departments to effectively enhance
its overall capacity to handle emergencies, thereby ensuring the smooth and orderly operation of production and business
activities.
Sustainability Report 2025
Case Various industrial parks actively carry out a series of fire safety activities
Contractor Safety Management
Hengli Petrochemical's industrial parks place a high priority on contractor safety. They have established management frame-
works for contractor occupational health and safety, including the Contractor Safety Management Measures and others. These
measures govern the selection, access, pre-entry preparation, on-site safety management, HSE training, and supervision and To mark Fire Safety Month, the Hengli (Suzhou)
The Hengli (Dalian Changxing Island) Industrial Park
Industrial Park organized a series of activities,
performance evaluation. They assess contractors' performance in areas such as operational qualifications and occupational organized a fire safety skills competition, combining fire
including a drill for the tank farm fire response
health and safety, and stipulate that all of the Company's occupational health and safety management systems also apply to safety training and awareness campaigns with fun sports
plan, presentations on fire safety knowledge,
activities. This initiative sparked employees' enthusiasm
and training on the use of fire safety equip-
contractors and their on-site personnel. This ensures strict compliance with relevant laws, regulations, supervisory requirements, for participation and interest in learning, while enhancing
ment. These initiatives effectively tested the
and applicable company policies throughout the collaboration. Each industrial park maintains close communication with their ability to respond to emergencies.
scientific soundness and practicality of the
park's fire emergency response plan and
contractors through regular thematic meetings and provides site induction training to ensure that all personnel entering the site
strengthened employees' fire safety awareness
possess the necessary safety knowledge and emergency response capabilities. The parks also urge contractors to comply with and skills.
relevant safety regulations, use personal protective equipment correctly, promptly identify and rectify potential hazards, and
continuously monitor and inspect the implementation of their HSE work.
Companies within the Hengli (Nantong) Indus-
trial Park held "119" emergency rescue skills
competitions and assessments, incorporating
safety knowledge and skills into these assess-
ments and competitions to fully motivate
employees to take the initiative in enhancing
their safety skills training.
The Hengli (Suqian) Industrial Park conducted
hands-on fire extinguisher training, organizing
the park's fire brigade to lead frontline
employees in simulated fire drills, ensuring
that "everyone participates and everyone
passes."
The Hengli (Huizhou) Industrial Park has orga-
nized a series of safety activities, including
specialized training sessions, fire drills, inspec-
tions to identify potential fire hazards in the
workplace, and firefighting skills competitions,
fostering a strong culture where "everyone
prioritizes fire safety and everyone participates
Hengli (Yingkou) Industrial Park, taking into account the
in fire safety efforts."
specific challenges of winter fire prevention, organized a
special training program as part of the "119" Fire Safety
Awareness Month. Fifty-four volunteer firefighters from various
departments and workshops actively participated in the train-
Safety and Integrity Training for Contractors Upon Site Entry ing. The program covered topics such as the analysis of typical
The Hengli (Yangtze River Delta) Industrial Park conducted a fire drill
fire incidents, methods for identifying common on-site
and training session. The drill included three main components: using
hazards, the use of firefighting equipment, and simulated fire
fire extinguishers, two-person hose deployment, and hands-on CPR
suppression drills. It focused on enhancing the response
practice. By using a competitive format to promote learning, the
efficiency and mental preparedness of the park's firefighters
event assessed employees' practical firefighting skills and effectively
when confronting early-stage fires, thereby effectively improv-
enhanced the entire workforce's emergency response capabilities.
ing the park's overall fire safety standards.
Safety Culture Construction Case
In alignment with the requirements of laws and regulations such as the Law of the People's Republic of China on Work Safety, the
Emergency Response Law of the People's Republic of China, and the Measures for the Administration of Contingency Plans for
Work Safety Incidents, the Company continues to refine its work safety accountability system, systematically advance the devel-
opment of a safety culture, and strengthen safety awareness among all employees.
The Company places great emphasis on the day-to-day integration of safety awareness and providing systematic training.
Adhering to the principle of "prevention first, training foremost," it has established a safety education and training system that
covers all employees, all positions, and all processes. In June 2025, Hengli Petrochemical's industrial parks proactively organized
Fire Emergency Skills The fire drill activity of Hengli Fire protection facility usage Hengli (Suqian) Industrial
awareness and advocacy sessions, drills, and safety improvement initiatives centered on the theme of the 24th National "Produc- Competition of Hengli (Huizhou) Industrial Park training at Hengli Park Fire Extinguisher
tion Safety Month": "Everyone Speaks Safety, Everyone is Emergency-Ready—Identifying Hidden Hazards Around Us." These (Dalian Changxing Island) (Suzhou) Industrial Park Practical Operation
initiatives have comprehensively enhanced employees' safety literacy. Industrial Park training
Sustainability Report 2025
Key Performance Unit 2025
Social Welfare
Total investment in safety education and training Thousand yuan 3,552.7
Hengli Petrochemical adheres to the value of "serving society and giving back to society." The Company organizes public welfare
Safety education and training sessions Session 5,643 activities such as tree-planting campaigns to protect the environment through concrete actions; it encourages employees to
participate in voluntary blood donation to contribute to public health; and it prioritizes educational equity as a key focus of its
The number of participants in safety public welfare initiatives, continuously donating special funds to primary and secondary schools to help advance educational
Person-time 244,974 equity; At the same time, the Company actively responds to national employment support policies and collaborates with local
education and training
governments to host job fairs, taking concrete actions to support local efforts in stabilizing employment and safeguarding
The total duration of safety education and training Hour 459,462 peoples livelihoods. During the reporting period, Kanghui New Material donated 100,000 yuan to the Experimental School in
Bayuquan District, Yingkou City, to enhance educational quality, build science education facilities, and improve school condi-
tions, including projects such as optimizing the campus learning environment and maintaining infrastructure. In addition, the
Coverage rate of safety education and training % 100
Company contributed external donations and public welfare investments totaling 50 thousand yuan.
Case Blood Donation Campaign
Occupational Health Protection
Hengli Petrochemical's industrial parks comprehensively safeguard employees' occupational health and safety during work In June 2025, Kanghui New Material partnered with the Yingkou Central Blood Station to organize a series of
operations through measures such as placing prominent warning signs in the workplace, conducting regular testing for occupa- voluntary blood donation campaigns, making a tangible contribution to social welfare. Company employees
tional hazard factors, distributing standard-compliant personal protective equipment, and organizing annual health checkups. enthusiastically responded to the call during the campaigns, putting their commitment to public welfare into
The Company regularly commissions professional institutions to conduct monitoring and assessment of occupational health action. A total of 131 employees successfully donated blood. On December 25, 2025, Kanghui New Material
hazards, establishes comprehensive occupational health surveillance records for employees, and dynamically tracks their health received a commendation from the Liaoning provincial government. This honor recognizes not only Kanghui
status. By leveraging family doctor clinics, the company has established a routine health service platform, enabling employees New Material's blood donation initiative, but also the compassion and dedication of all participating employees.
to access standardized occupational health management services without leaving the premises.
Key Performance
During the reporting period, the coverage rate of occupational injury insurance for employees was 100%. The
rate of occupational health checkup has reached 100%, and the incidence of occupational disease cases
among employees has remained at 0 for many consecutive years.
Sustainability Report 2025
Case "Volunteer Petrochemical, Green Beauty with Me" Tree-planting Activity
Rural Revitalization
In November 2025, the Huizhou Chemical Industry Youth League Working Committee, in collaboration with the
Daya Bay Blue Bay Public Welfare Association, organized a tree-planting event themed "Volunteering for the
Petrochemical Industry: Green Beauty Starts with Me." Hengli (Huizhou) Industrial Park promptly organized a With a focus on the national overall development, the Company is committed to supporting rural revitalization. We have long
team of volunteers to participate in the event. The volunteers were enthusiastic as they worked to bring new paid close attention to the development and construction of underdeveloped townships in Yanbian Korean Autonomous
greenery to the land. Prefecture. Since 2020, the Company has repeatedly allocated special funds for projects such as fostering local specialty indus-
tries, supporting education, and providing assistance to those in need. Additionally, the Company actively purchases local
specialty agricultural products, supporting the "going global" of these products through concrete actions. Through practical and
effective measures, the Company helps the Yanbian region consolidate and expand the achievements of targeted poverty
alleviation, promotes the rural revitalization of industries, and improves the well-being of the people. During the reporting
period, the Company's investments in poverty alleviation and rural revitalization reached 345 thousand yuan.
Sustainability Report 2025
Chapter GRI Standards Index
Appendix 2-7/201-3/401-1/401-2/401-3/403-3
Employee Rights and Benefits
/403-6/403-7/404-3/405-1/406-1/406-1/408-1/409-1
Employee Growth 2-7/404-1/404-2
People-oriented,
Building a
Appendix 1: GRI Standards Index
Production Safety 2-27/403-1/403-2/403-5/403-6/403-7/403-8
Responsible Future
Together
Rural Revitalization 415-1
Social Welfare 203-1/413-1
Chapter GRI Standards Index
GRI Standards Index /
About the Report / 2-2/2-3/2-25/2-26/2-27
Appendix
/ 2-22 SSE Sustainability Reporting Index /
Message from the Chairman
About Hengli Petrochemical / 2-1/2-6/2-4/201-1 Key Performance Form /
Sustainability System 2-12/2-13/2-14/2-18/2-19
Sustainability Management Stakeholder Engagement 2-16
Appendix 2: SSE Sustainability Reporting Index
Materiality Assessment 2-12/2-13/2-29/3-1/3-2/3-3
Dimension Issue Chapter of the Report
Corporate Governance 2-9/2-10/2-12/2-17/2-18/2-19/2-20/2-29/405-1
Governance as the Response to Climate Change; Seizing Clean
Cornerstone, Fostering Risk Management 2-15/207-1/207-2 Response to Climate Change Technology Opportunities
Long-Term Prosperity
Business Ethics 205-1/205-2/205-3/206-1 Pollutant Emissions Controlling Pollutant Discharge
Environmental Compliance Management 2-27/101-2/101-4/101-5/304-1/304-2 Waste Disposal Controlling Pollutant Discharge
Response to Climate Change 201-2/305-1/305-2/305-4/305-5 Ecosystem and biodiversity protection Environmental Compliance Management
Green and Low-Carbon,
Safeguarding Our
Environmental Environmental Compliance Management Environmental Compliance Management
Controlling Pollutant Discharge 303-1/303-2/305-6/305-7/306-1/306-2/306-3/306-5
Ecological Home
Efficient Utilization of Resources 302-1/302-3/302-4/303-1/303-2/303-3/303-4/303-5 Energy Utilization Efficient Utilization of Resources
Seizing Clean Technology Opportunities 305-5 Water Resource Utilization Efficient Utilization of Resources
Efficient Utilization of Resources; Seizing Clean
Product Quality Management 416-2/417-2 Circular Economy Technology Opportunities
Optimizing Customer Service / Rural revitalization Rural Revitalization
Value Symbiosis, Upholding Innovation-driven Development / Contributions to society Social Welfare
Achieving Excellence
Strengthening Information Security Risk Social Innovation-driven Upholding Innovation-driven Development
with Craftsmanship 418-1
Management
Sustainable Supply Chain 2-8/204-1/308-1/308-2/409-1/414-1 Ethics of science and technology /
Chemical Safety 403-2/403-5/403-6/403-7 Supply chain security Sustainable Supply Chain
Sustainability Report 2025
Dimension Issue Chapter of the Report Environmental Key Performance
Equal treatment to small and medium-sized
Sustainable Supply Chain
enterprises Theme Indicator Unit 2025
Product Quality Management; Optimizing
Safety and quality of products and services Volatile Organic Compounds (VOCs) Ton 587.33
Customer Service
Social Data security and customer privacy protection Strengthening Information Security Risk Management Waste Gas Total waste gas emissions Ton 5,588,908,418
Employee Rights and Benefits; Employee
Employees Waste gas emission intensity Tons per million yuan of revenue 27,807.45
Growth; Production Safety
Due diligence Sustainability Management Total wastewater discharge Ton 28,505,410
Communications with stakeholders Stakeholder Engagement Wastewater discharge intensity Tons per million yuan of revenue 141.83
Governance Anti-commercial bribery and anti-corruption Business Ethics; Sustainable Supply Chain COD emissions Ton 751.84
Wastewater
Anti-unfair competition Business Ethics Ammonia nitrogen emissions Ton 9.98
Total phosphorus emissions Ton 5.68
Note: The Company's business does not involve scientific research, technology development, or other activities in ethically sensitive domains such
as life sciences and artificial intelligence. With reference to Article 43 of the Guidelines No. 14 of Shanghai Stock Exchange for Self-Regulation of Total Nitrogen emissions Ton 188.65
Listed Companies—Sustainability Report (Trial), the Company is not required to disclose the topic of ethics of science and technology.
General waste discharge Ton 3,435,469
Hazardous waste discharge Ton 153,946
Waste
Appendix 3: Key Performance Form Hazardous waste intensity Tons per million yuan of revenue 0.77
Compliance rate of hazardous waste disposal % 100
Environmental Key Performance
Theme Indicator Unit 2025 Thermal coal Ton 10,318,192
Energy
Environmental protection investment Million yuan 838 Natural gas 10000 m? 44,854
Consumption
Environmental accident Case 0 Total amount of purchased electricity MWh 5,493,252
Violations of environmental laws and regulations Case 0 Water withdrawal 10000 tons 20,612
Environmen- Compliance rate for pollutant monitoring % 100 Conventional water withdrawal (fresh water) 10000 tons 14,907
tal Compli-
ance Availability of environmental protection facilities % 100 Unconventional water resources withdrawal 10000 tons 5,705
Implementation rate of the environmental protection "three
% 100 Water Total water consumption 10000 tons 7,309
simultaneous" requirement for construction projects
Coverage of operational sites for environmental audits % 100 Resources Water consumption intensity Tons per million yuan of revenue 363.64
Nitrogen Oxides (NOx) Ton 4,616.06 Total water usage 10000 tons 699,968
Waste Gas
Sulfur Oxides (SOx) Ton 1,908.69 Volume of circulating water 10000 tons 679,356
Particulate Matter (PM) Ton 349.96 Circulating water water rate in total water usage % 97.06
Sustainability Report 2025
Social Key Performance
Environmental Key Performance
Theme Indicator Unit 2025
Theme Indicator Unit 2025
By Age
Clean technology investment Million yuan 238
R&D investment Million yuan 1,626
PV power generation kWh 202,079,909
Clean Ratio of R&D investment to revenue % 0.81
Biogas power generation kWh 361,129
Technology
Total number of patents Patent 2,039
Biomass fuel tce 343,035
Number of granted invention patents Patent 977
Total renewable energy consumption tce 367,915 Innovation
and R&D
Number of granted utility model patents Patent 1,062
Total greenhouse gas emissions tCO₂e 45,949,346
Number of software copyrights Patent 39
Greenhouse gas emission intensity tCO₂e/million yuan of revenue 228.62
Carbon
Emissions National high-tech enterprises Company 8
Scope 1 greenhouse gas emissions tCO₂e 38,434,129
National certified enterprise technology center Company 2
Scope 2 greenhouse gas emissions tCO₂e 7,515,217
Postdoctoral research workstations Company 3
Information Violations of information security and privacy
Case 0
Security protection regulations
Product
Resolution rate of customer complaint % 100
Quality
Number of chemical emergency drills Time 3,606
Social Key Performance Chemical Safety
Chemical leakage incidents Case 0
Theme Indicator Unit 2025
Total number of employees Person 37,368
Total number of R&D personnel Person 4,348
By Educational Background By Function
Production Person 26,312
Below bachelor degree Person 2,607
Sales Person 219
Bachelor Person 1,591
Technology Person 7,177
Master Person 139
Doctor Person 11 Employee Finance Person 234
Innovation Composi-
and R&D tion Administration Person 1,190
By Age
Others Person 2,236
Under 30 years old (30 excluded) Person 1,695
By Educational Background
Aged 30 to 40 (30 included, 40 excluded) Person 1,851
Doctor Person 11
Aged 40 to 50 (40 included, 50 excluded) Person 631
Master Person 284
Aged 50 to 60 (50 included, 60 excluded) Person 161
Bachelor Person 6,415
Sustainability Report 2025
Social Key Performance Social Key Performance
Theme Indicator Unit 2025 Theme Indicator Unit 2025
By Educational Background External donations and public welfare investments Thousand yuan 50
Social
Contribution
Junior college degree and below Person 30,658 Investments in poverty alleviation and rural revitalization Thousand yuan 345
Employee
Composition
Social insurance coverage rate % 98.16
Labor contract signing rate % 99.56
Governance Key Performance
Total number of employee training sessions Time 25,669
Theme Indicator Unit 2025
Employee Total number of employees trained Person-time 506,376 Number of independent directors Person 3
Training
Total duration of employee training Hour 322,701 Independent directors ratio % 37.5
Corporate
Average training hours per employee Hour 8.64 Governance
Number of female directors Person 1
Investment in production safety Million yuan 554 Female directors ratio % 12.5
Potential hazard screening and rectification rate % 100 Payments of all types of taxes Billion yuan 13.128
Tax
Compliance
Safety emergency drills Session 4,343 Material tax-related litigation or arbitration Case 0
Number of safety administrators Person 533 Execution rate of the Anti-commercial Bribery Agreement % 100
Total investment in safety education and training Thousand yuan 3,552.7 Business Ethics Coverage rate of business ethics training % 100
Safety education and training sessions Session 5,643 Cases of corruption or bribery litigation Case 0
Number of participants in safety education and training Person-time 244,974 Temporary reports Copy 81
Information
Safety
Total duration of safety education and training Hour 459,462 Disclosure Periodic reports Copy 4
Production
Coverage rate of safety education and training % 100
Certification rate for special operations personnel and
% 100
special equipment operators
Employee physical examination coverage rate % 0
Number of major production safety accidents Case 100
Incidence rate of occupational diseases % 0
Coverage rate of occupational injury insurance for employees % 100
Occupational health checkup rate % 100
Sustainability Report 2025
Feedback
Thank you for reading the Hengli Petrochemical Sustainability Report 2025. To improve Hengli
Petrochemical's efforts in environmental, social, and governance aspects, further enhance our
sustainable development capabilities and levels, and strengthen communication with all sectors of
society, we sincerely hope that you will provide valuable feedback and suggestions on our work
and report amidst your busy schedule.
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