Hengyi Petrochemical Co., Ltd 2025 Environmental, Social, and Governance Report
CONTENTS
Part One
Enduring
Commitment
Statement
Sound Governance Quality First Tech-Driven Leadership
Laying the Foundation Constantly Crafting Charting a New Course in
for Sustainable Growth Excellence Smart Manufacturing
Corporate Governance 12 Work safety 20 Innovation Activation 32
Compliance and Risk 16 Product Quality 26 Digital and Intelligent 36
Management Management Development
Business Ethics 17 Precise Customer 28 IPR Protection 36
Service
Party Leadership 19 Industry Collaboration 37
Responsible Supply 28
Chains
CONTENTS
Part Two
Shared Growth
Advancing Together
Towards a Sustainable
Future
Green and Low-Carbon People-Centric Approach Community Engagement
Practices Building a Talent Bringing Warmth and Better
Embracing Ecological Powerhouse Livelihoods
Harmony
Circular Economy 40 Employee Rights Protection 52 Support for the "Beautiful 60
Countryside" Initiative
Climate Change Response 43 Occupational Health and Safety 54
Community Engagement 61
Environmental Compliance 47 Unblocked Career Pathways 55
Management Corporate Philanthropy 62
Colorful Employee Life 59
Water Stewardship 48 Contribution to the BRI 62
Pollution Reduction 49
Hengyi Petrochemical Co., Ltd 2025 Environmental, Social, and Governance Report
About this Report
This is the seventh independent report released by Hengyi Petrochemical Co., Ltd. It comprehensively and thoroughly discloses
the Company's environmental, social, and governance (ESG) information for the year 2025, responding to the concerns and
expectations of stakeholders.
Organizational Scope
This report takes "Hengyi Petrochemical Co., Ltd." as the main entity, including its subsidiaries, branches, affiliated institutions,
and related organizations.
Reporting Period
This report covers the period from January 1, 2025 to December 31, 2025. Some content may be appropriately extended beyond
the stated period according to disclosure needs.
Reporting Standards
This report is prepared in accordance with the requirements of the Shenzhen Stock Exchange's Self Regulatory Guideline for
Listed Companies No. 17 – Sustainability Report (Trial) and Self Regulatory Guideline for Listed Companies No. 3 – Preparation of
Sustainability Report, and with reference to the Global Reporting Initiative's GRI Sustainability Reporting Standards (GRI Standards)
Finance's Application Guide to the Enterprise Sustainability Disclosure Standard – Basic Standard (Trial).
Explanation of Names
For ease of expression and reading, "Hengyi Petrochemical Co., Ltd." is referred to as "Hengyi" "the Company"or "we" in this report.
Data Description
All information and data cited in this report come from the Company's official documents, statistical reports, and financial reports.
The material used in this report is provided by Hengyi employees and partners, for the sole purpose of disclosing Hengyi's
sustainability management progress and not for commercial use. Any financial data disclosed in this report that differs from the
annual report shall be subject to the annual report. Other data are from the Company's internal statistics. Unless otherwise noted,
the currency used in this report is "RMB".
Report Access
The Company's Board of Directors approved this report on April 14, 2026. This report is available in both Simplified Chinese and
English versions. In case of any inconsistency in content understanding, the Simplified Chinese version shall prevail. You can
download this report from Hengyi Petrochemical Co., Ltd.'s website.
Hengyi Official Website: www.hengyishihua.com / CNINFO: www.cninfo.com.cn
Chairman's Statement
Chairman's Statement
The year 2025 marks the conclusion of Hengyi's sixth Five-Year Plan, the
planning year for the seventh Five-Year Plan, and the starting point for
advancing toward the Company's second half-century goals. Amid evolving
global industrial dynamics and energy transition, Hengyi upholds the corporate
spirit of "Relentless Pursuit of Excellence" and, together with employees and
partners, embarks on a new journey. ESG principles remain at the core of our
approach to high-quality development. We are strengthening our foundation
through strategic upgrading, driving breakthroughs through technological
empowerment, demonstrating responsibility through green practices, and
staying true to our original aspiration through shared development. With these
efforts, we move steadily forward toward our vision of becoming "one of the
world's top-tier petrochemical industry groups."
Over the past year, we have sharpened our focus on core businesses, creating new advantages across the industry chain. As a
global leader in the integrated "refining–chemicals–fiber" value chain, we deepen the coordinated strategy of marine and inland
development alongside oil–coal integration. Existing capacity has been operated safely, stably, and efficiently, while major projects
drive structural optimization and industrial upgrading, enhancing our balanced, pillar-based integrated industrial structure. During
the reporting period, Phase I of our Qinzhou Project in Guangxi successfully entered trial production, while the Hengyi PMB refinery
and petrochemical Phase II project in Brunei progressed steadily. All ongoing projects advanced in line with their targets, laying a
solid foundation for the Company's long-term development.
Over the past year, we have placed technological innovation at the forefront to unlock new drivers of industrial upgrading.The
"Technology-Driven Hengyi" strategy has been advanced with firm momentum, as R&D intensity continued to rise and efforts
focused on frontier fields such as green chemicals and the circular economy. We have brought together global innovation
resources, strengthened the introduction of high-caliber talent, and steadily enhanced our capabilities in tackling critical core
technologies. Sustained efforts in core fields—including chemical recycling of waste textiles and the production of high-quality
polyester feedstocks—have accelerated the industrialization of research outcomes. Through these initiatives, technological
innovation is powering our shift toward high-end, intelligent, and green development, injecting strong momentum into high-
quality growth.
Over the past year, we have remained committed to green development, opening up new pathways in the circular economy.
Guided by national strategies on green production, we embed green manufacturing and circular economy principles across
our operations. A range of green initiatives—including photovoltaic power generation, esterification-based power generation,
and resource recycling—have been advanced to support the development of a low-carbon and efficient production system.
We have also established a comprehensive waste textile recycling network to enable resource reuse and environmentally
responsible development. Meanwhile, we continue to promote green processes, new energy applications, and waste heat recovery
technologies, fostering a resource-efficient and eco-friendly enterprise and accelerating the green and low-carbon transformation
of the industrial chain.
Over the past year, we have put our people-first principle into practice, marking a new chapter in building a community with a
shared future. With a focus on safeguarding employee health and rights, we continuously improve working conditions and refine
our incentive mechanisms. Through the continued rollout of share repurchase programs and employee stock ownership plans,
we have broadened access to the Company's development achievements. Meanwhile, we expand our charitable and educational
funds to give back to society, supporting local development and improving livelihoods. By advancing coordinated growth among
the Company, employees, investors, and communities, we demonstrate our unwavering commitment to social responsibility.
and One garment" to "Two Strands of Fiber"development pathway while accelerating the cultivation of new quality productive
forces. We will continue to uphold ESG principles, striving for stronger performance, a greener foundation, and a deeper sense of
responsibility. Through dedicated effort, we will open a next chapter in Hengyi's high-quality development and deliver an even
more outstanding ESG performance.
Hengyi Petrochemical Co., Ltd 2025 Environmental, Social, and Governance Report
About Hengyi
Business Layout
Hengyi Petrochemical (000703.SZ) is a global leader in the integrated "refining–chemicals–fiber" value chain. Anchored by its PMB
refinery and petrochemical project in Brunei and fortified by domestic PTA-PET and CPL-PA6 facilities, the Company has built a
closed-loop industrial chain from crude oil processing to chemical fiber products through cross-border coordination and vertical
integration across the upper, middle and lower reaches. This has created a distinctive "polyester + nylon" dual-engine model with
balanced growth across all business segments. We have now fully commenced the Brunei PMB refinery and petrochemical Phase II
project to expand our global footprint and enhance our integrated chain competitiveness worldwide.
While maintaining industry leadership, the Company is accelerating the "Technology Hengyi" strategic advancement. Guided by
the principles of "green manufacturing" and "circular economy", and focusing on its core business areas, Hengyi steadily promotes
technological R&D, product commercialization, and process innovation for high-value-added products. At the same time, it
actively drives the R&D and industrial application of supporting products such as catalysts, spin finishes, and additives, thereby
solidifying the foundation for sustainable development. Driven by digital and intelligent construction, the Company strives toward
the ambitious goal of becoming a leading domestic and world-class private multinational group in the "refining-chemicals-fiber"
sector.
Hengyi Culture
Persistence rewards
the diligent, noble
aspirations reach far
Pragmatism, Build a century-old,
responsibility, Philosophy
evergreen foundation
surpassing, and and stand among the
sharing
Core values Mission world's renowned
enterprises
Become one of
Never stop
Vision Spirit
the world's top-
moving forward,
Hengyi Culture
tier petrochemical
create brilliance
industry groups
Honors
Honors
Project "Development of novel
titanium-based catalysts and
complete set of technologies
for antimony-free, eco-friendly
Waste textile recycling technology polyester materials":won the first
was included in the 2025 high-value prize of the Zhejiang Provincial
patent cultivation list Science and Technology Progress
Award
Smart manufacturing application
Subsidiary Hengyi High-Tech was case "Focusing on 'Two Centers
listed in the first batch of 2025 Construction' to Comprehensively
Zhejiang Provincial Advanced-Level Promote Enterprise Digital
Smart Factories (Batch 1) by the Transformation" won the 2025 China
Zhejiang Provincial Department Intelligent Production Outstanding
of Economy and Information Application Award
Technology
Listed in the first batch of Zhejiang
Subsidiary Haining Hengyi: national
Provincial Manufacturing Single-
and municipal-level "Green Factory"
Champion Demonstration
Enterprises
Corporate culture achievement
Hengyi's project Digital Technology Construction and Implementation
Empowering Employee Human Path of High-Efficiency Corporate
Resource Management Practices Culture Management System
won the First Prize of Zhejiang Guided by Core Corporate Values
Provincial Enterprise Management won the Second Prize of the
Modernization Innovation 16th National Corporate Culture
Achievement Award in 2025 Achievement Award
Mr. Zheng Xingang, Vice President,
Board Secretary, and Financial
Director of the Company, won
the 21st New Fortune Gold Board
Secretary and the "2025 5A 2025 Best Practice Award for
Evaluation for Board Secretaries Board Offices from the China
of Listed Companies" by the China Association for Public Companies
Association for Public Companies
Hengyi Petrochemical Co., Ltd 2025 Environmental, Social, and Governance Report
ESG Highlights in 2025
Governance Performance
Shareholders meetings held 4 times, meetings of the Board of Directors held 8 times
Covering more than 100 investment institutions on both the sell-side and buy-side, reaching nearly 1,000 investor
participations
Disclosed on the official websites of Hengyi and SZSE 203 announcements
Since its listing, the company's cumulative cash dividends exceeded RMB 5.6 billion
The company implemented the 6 phases of the share repurchase program and has repurchased shares worth RMB 4.2
billion
Anti-corruption & integrity training sessions held 6 times,1,523 Participants, training 2,285 hours
Environmental Performance
Invested in environmental protection RMB 850 million
Total CO2 emissions 7.99 million tons
The emission intensity of VOCs decreased by 5 %,the emission intensity of particulate matter (PM), sulfur dioxide (SO ),
and nitrogen oxides (NOx) each declined by 10 %
The company's PV installed capacity has reached 258,836 kW
With annual green power generation-including solar PV, waste heat recovery, and esterification-based power exceeding
Social Performance
Invested in safety RMB 142.83 million
Accumulated purchase under the ESOP 480.93 million, amounting to RMB 5.2 billion, benefited 14,580 employee person-
times
Valid granted patents 617 granted in total, national and provincial-level research 11 projects undertaken（as for
Total donations RMB 25.07 million by Hengyi and its controlling shareholder Hengyi Group
The company has organized employees participants in voluntary blood drives without compensation 26 times,
Mobilizing 6,059 donors
The company has provided local jobs in Brunei for 922 persons
Sustainability Management
Sustainability The Company deeply integrates core ESG concepts and evaluation
Management
criteria into its entire management process. Based on its business
characteristics and development realities, it has built a systematic
and professional ESG management system. By systematically
identifying key risks and opportunities in environmental, social,
and governance areas, the Company establishes goal-oriented
management and improvement mechanisms, coordinates the
implementation of sustainability practices, and achieves an organic
unity and virtuous cycle between corporate value enhancement and
social responsibility fulfillment.
ESG Development The Company has set up a top-down, multi-party collaborative
Management
ESG structure. The Board of Directors is the highest decision-
making body for ESG governance, guiding the execution and
implementation of the Company's sustainability work, providing
important support for ESG development, and promoting the
Company's ESG performance.
ESG
management framework
Functional Production
Board of Directors Senior Management Departments and Departments
Related Institutions and Subsidiaries
Decision Coordination Level Facilitation Level Execution Level
Responsible for guiding Responsible for Functional departments As the execution level,
t h e C o m pa n y ' s E S G implementing the are responsible for primarily responsible for
st ra t e g i c d i r e c t i o n , Board's ESG strategy undertaking ESG routine ESG information
ensuring strategy a n d m a n a ge m e n t projects, coordinating management, receiving
implementation and requirements, and and facilitating ESG management
integration of ESG regularly reporting day?to?day ESG guidance from
concerns into the ESG planning, m a n a g e m e n t . headquarters, and
decision?making progress and External collaborative providing feedback
process. achievements to the organizations provide on management
Board. external data and performance.
i n te l l e ct u a l s u p p o r t
for the Company's ESG
work.
Hengyi Petrochemical Co., Ltd 2025 Environmental, Social, and Governance Report
Stakeholder The Company attaches great importance to communication and exchanges with stakeholders.
Communication
Through diversified channels, it understands stakeholder concerns, actively takes measures to
respond appropriately, seeks stakeholder support and trust, and continuously improves social
responsibility management.
Stakeholder identification Demands and expectations Communication methods
Compliance operation Government supervision
tax payment Seminars, major events
Waste emissions Press releases/information
announcements
Government and Local employment promotion
regulators Local economic development Company website
Climate change and carbon emissions Information disclosure
Strengthened corporate governance Information disclosure
Performance growth and returns Results announcement meetings
Business ethics Shareholders' meetings
Truthful, accurate, timely and Company website
Shareholders and complete information disclosure
investors Daily reporting and communication
Investor site visits
Hotline/email/WeChat official account
Equal employment, compensation and Employee representative congress
benefits Suggestion boxes/email
Employee care Employee activities
Employees Occupational health and safety Website, WeChat official account
Smooth career development
Integrity management Satisfaction surveys
Good customer relationships Hotline/email
High-quality products and services Customer feedback mechanism
Customers Product innovation Customer visits
Protection of customer rights Company website
Fairness and transparency Regular visits
Responsible procurement Supplier conferences
Partners Intellectual property protection Hotline/email
Information and resource sharing Bidding meetings
Harmonious community development Charity activities
Low-carbon and environmental Field research
protection
Hotline
Communities Public welfare and charity support
Media coverage
Job opportunities
Sustainability Management
Materiality To address the core concerns of our stakeholders, we conduct systematic ESG materiality
Assessment
assessments aligned with global standards, macro policies, and industry trends to scientifically
identify key sustainability topics. We evaluate and prioritize these topics through a double
-materiality framework, assessing their impact materiality and their financial materiality to
the Company. These results directly inform and optimize our ESG strategy and execution. By
standardizing the rigorous identification, and prioritization, we enhance resource allocation
and management efficiency, providing solid decision-making support for the scientific
formulation of ESG work plans.
Highly significant
Ensuring product quality
Strengthening safety responsibility Deepening
innovation and
R&D
Responsible supply chain
Compliance operation
Company's Finances
The Importance to the
Climate change response
Promoting green Optimizing
Business ethics Reducing pollution processes resource use
Community public Warm emissions
Protecting
welfare engagement employee Investor relations employee rights Smooth career
care Provide high-quality services pathways
ESG governance
Deepening the Belt and Road
Initiative
Enhance environmental management
Insignificant The Importance of Economic, Social and Environmental Impacts Highly significant
Double materiality topics Impact materiality topics only
Ensuring product quality Optimizing resource use Investor relations
Strengthening safety Protecting employee rights Business ethics
responsibility Smooth career pathways Warm employee care
Compliance operation Promoting green processes ESG governance
Deepening innovation and R&D Reducing pollution emissions Deepening the Belt and Road
Responsible supply chain Provide high-quality services Initiative
Climate change response Enhance environmental
management
ESG Double Materiality Matrix in 2025
Hengyi Petrochemical Co., Ltd 2025 Environmental, Social, and Governance Report
Enduring Commitment
Building a Sustainable and
Thriving Industry
Part One
Contributions to UN SDGs
Chairman’s Statement
Guided by the spirit of "Relentless Pursuit of Excellence," Hengyi anchors its long-term
growth on robust governance, fortifying its foundation for sustainability through rigorous
internal controls and compliance. We differentiate ourselves through superior product
quality and service, where a dedication to craftsmanship in every detail builds long-term
customer trust. We harness technological innovation as a key driver of industrial upgrading,
leveraging breakthroughs to boost energy efficiency and accelerate product evolution.
Aligned with our vision to "build a century-old enterprise and join the ranks of world-
renowned companies," we are dedicated to enhancing industrial resilience and driving
higher quality and more sustainable growth.
Sound Governance: Laying the Foundation for Sustainable Growth 12
Quality First Constantly Crafting Excellence 20
Tech-Driven Leadership Charting a New Course in Smart Manufacturing 32
Hengyi Petrochemical Co., Ltd 2025 Environmental, Social, and Governance Report
Sound Governance
Laying the Foundation for
Sustainable Growth
Hengyi continues to enhance corporate governance through a modern governance mechanism with clear responsibilities
and effective oversight. The Company strengthens risk control and internal control systems, enhances investor relations
management, upholds integrity and compliant operations, and adheres to Party leadership, through effective governance,
we enable high-quality and sustainable development.
Corporate Governance structure enhancement
Governance The Company strictly complies with laws and regulations, including China's
Company Law, Securities Law, Code of Corporate Governance for Listed
Companies, and Rules Governing the Listing of Stocks on the Shenzhen Stock
Exchange(SZSE). We have established a governance structure with clear
responsibilities and effective oversight, further improving the modern corporate
governance system.
Hengyi Petrochemical Co., Ltd
Strategy, Investment & ESG
Committee Shareholders' Meetings
Remuneration, Appraisal &
Nomination Committee
Board of Directors
Risk Control Committee Board Office
Audit Committee Senior Management
Management Center
Production
Business Unit
Caprolactam-Nylon 6
Department
Investment Management
Department
Human Resources
Data Center
Information and
Administration Office
Department
Financial Management
Department
Treasury Management
Protection Department
Safety and Environmental
Affairs Department
Audit and Legal
Contributions to UN SDGs
Sound Governance: Laying the Foundation for Sustainable Growth
Shareholders and Shareholders' Meetings
The procedures for convening, holding, and voting at Shareholders' Meetings, as well as
attendee qualifications, comply with applicable laws and regulations, including China's
Company Law, the Rules for Shareholders' Meeting of Listed Companies, and the Articles of
Association. The Company adopts a hybrid online and on-site voting system to fully disclose
minority shareholders' voting results, safeguarding all shareholders' rights to information, Shareholders' meetings held
participation in decision-making, and oversight of major resolutions.
Directors and the Board of Directors
As the highest decision-making body, the Board of Directors is accountable to the Shareholders' Meeting and makes decisions
on overall governance strategy, major operational matters, and ESG strategy. Board members perform their duties with a strong
sense of responsibility, and regular training on laws, regulations, industry policies, and governance capabilities is organized to
ensure scientific and standardized decision-making.
Board diversity
The Company places emphasis on board diversity in age, gender, professional background and professional competence.
Directors possess extensive experience in industry and risk management across multiple fields, including finance, law, and
economics.
The average age of directors and senior management is 48, with over half of the directors under 45, demonstrating the
Company's modern, innovative and dynamic management.
Board independence
The Company has appointed 3 independent directors, including 1 with an
accounting background.
Independent directors owe duties of loyalty and diligence to the listed
Board
company and all shareholders, and comply with laws, administrative
Governance
regulations, provisions of the China Securities Regulatory Commission, stock
exchange rules, and the Articles of Association.
Independent directors play roles in checks and balances, supervision and
oversight and professional advisory within the Board, safeguarding the
overall interests of the listed company and the legitimate rights of minority
shareholders.
Board professionalism
Board members possess relevant industry experience and expertise, combining strong leadership, innovation
drive and risk management capability, thereby enhancing the quality and effectiveness of corporate governance.
The Company organizes directors and senior management to actively participate in professional training,
continuously improving their theoretical knowledge and performance capabilities.
Board meetings
Directors
Including independent
Share of independent
Female
Share of female
held directors directors director directors
Hengyi Petrochemical Co., Ltd 2025 Environmental, Social, and Governance Report
Honors
Hengyi won the 2025 Best Mr. Zheng Xingang, Vice President, Board
Practice Case of Listed Secretar y, and Chief Financial Officer
Companies' Board o f t h e C o m p a n y, w a s a w a r d e d t h e
Offices from the China 21st New Fortune Board Secretary
Association for Public Award and received the "2025 5A
Companies Evaluation for Board Secretaries of
Listed Companies" from the China
Association for Public Companies
Senior management
The senior management serves as the Company's executive body and is appointed by and accountable to the Board of Directors.
The General Manager, Deputy General Managers, Chief Financial Officer, and Board Secretary constitute the senior management
and act as the core execution team for daily operations, reporting directly to the Board. The senior management translates
strategies formulated by the Board into concrete actions. This includes strategic target decomposition and implementation, overall
coordination of daily operations, financial management and risk control, and compliance execution. Through regular reporting to
the Board, it ensures efficient, compliant and sustainable operations.
The senior management team consists of 7 experts in research and innovation, petrochemicals, engineering, procurement, sales,
finance, and capital operations, with professional judgment capabilities and extensive management experience.
Key practices in strengthening corporate governance in 2025
The Board has newly established a specialized governance structure centered on the Strategy, Investment, and ESG
Committee, embedding ESG requirements into decision-making, operations, and risk management processes
In accordance with the revised Company Law, the Board of Supervisors was abolished, and its functions are exercised by
the Audit Committee of the Board
A total of 35 regulations, including the Articles of Association, Rules of Procedure for Shareholders' Meeting, and Rules of
Procedure for the Board Meeting, were revised to steadily enhance the standardization of corporate governance
One female executive was newly appointed, continuously advancing management diversity and bringing broader
perspectives and vitality into decision-making
Information disclosure and investor relations
The Company strictly complies with the Administrative Measures for Information Disclosure of Listed Companies, the Guidelines for
Investor Relations Management of Listed Companies, and other relevant regulatory requirements. We have established a rigorous
and clearly defined disclosure process and accountability system to ensure the authenticity, accuracy, and completeness of
disclosed information. This enables shareholders to fully understand the Company's operational performance, financial position,
and future development strategy.
Sound Governance: Laying the Foundation for Sustainable Growth
Announcements disclosed on the official websites of
Regular reports issued
Investor exchange activities
Hengyi and SZSE held
The Company actively promotes a multi-tier investor relations management system and maintains diversified communication
channels to ensure shareholder supervision and feedback. Through performance briefings, brokerage strategy sessions, investor
hotlines, and SZSE Easy IR platform, we engage with investors on business performance and development, sustainability and
strategic planning. By establishing an efficient feedback mechanism to address investor concerns in a timely and professional
manner, we actively convey corporate value and foster a transparent, efficient bridge for investor communication.
In 2025, the Board Office actively organized investor engagement activities, covering more than 100 investment institutions on both
the sell-side and buy-side, reaching nearly 1,000 investor participations. We held two performance briefings to address around 100
investor questions, and provided timely and effective responses to 73 inquiries on the SZSE Easy IR platform.
Company website, email Shareholders' meetings
WeChat official account Regular reports
Investor hotline Investor Multi- Media communication
Channel
Online one-on-one & group
conference calls Communication Roadshows
Onsite investor / project field
Online results briefings (Panorama)
research
Brokerage strategy sessions SZSE Interactive Easy Platform, etc.
Protecting shareholders' rights is a key focus of corporate governance. While striving to enhance operational performance and
profitability, the Company strictly complies with the Articles of Association and relevant regulations and consistently prioritizes
shareholder returns. Taking into account the Company's stage of development, profitability, and cash flow, we formulate and
implement a stable, consistent and sound dividend distribution policy. This aims to deliver long-term and stable returns to
shareholders.
RMB 5.6 billion+ RMB 200 million 63.7 million RMB 600 million
Cumulative cash dividends Cash dividends in 2025 Shares repurchased and Transaction value of
since listing canceled canceled shares
RMB 4.2 billion
Share 6 repurchase programs implemented, cumulative repurchase value
Hengyi Petrochemical Co., Ltd 2025 Environmental, Social, and Governance Report
Compliance The Company upholds the core governance philosophy of "compliance as the cornerstone,
and Risk
governance as the enabler, and ESG as the driver".We have established a governance
framework led by the Board of Directors, supported by specialized committees, and
Management
coordinated across all departments. We also integrate compliance requirements, ESG strategy
and business development, continuously improve compliance and risk management systems,
and strengthen internal control and audit oversight. These efforts help maintain a strong
compliance baseline and provide a solid foundation for stable and sustainable development.
Operational Guided by integration, prevention, and full-process control, the Company builds a compliance
compliance
management system deeply embedded in business operations, guided by integration,
prevention, and full-process control. We promote compliance from passive response to
proactive, value-based management. In 2025, the Company reported no incidents of non-
compliance.
At the system level At the organizational level In terms of process control
The Company has established We define a structure in which Compliance review is established
a co m p re h e n s i v e co m p l i a n ce the Board of Directors and senior a s a m a n d ato r y p re re q u i s i te
framework covering all businesses management assume ultimate for major decisions and core
and processes. We have developed responsibility, the compliance business. We implement full-
a three-tier system of compliance function coordinates, business process closed-loop management
documents, including specialized departments take primar y covering application acceptance,
compliance rules and standardized responsibility, and all employees risk assessment, review feedback,
operational procedures, ensuring are engaged. We operate a "three rectification and super vision.
that compliance requirements are l i n e s o f d e fe n s e " m e c h a n i s m Tiered and categorized compliance
well-defined, operationalized and featuring business self-control, training is conducted, with senior
effectively enforced. internal control and legal ma na ge me nt ta k i ng t h e lea d
super vision, and independent in promoting the principle that
internal audit accountability, "compliance creates value."
thereby strengthening the risk
prevention network.
Internal control The Company strictly complies with the Basic Standards for Enterprise Internal Control
management
and supporting guidelines. We update and improve our internal control system, forming a
framework that is scientifically designed, practical, and effective in operation. Annual internal
control assessments and systematic policy reviews are regularly conducted to ensure the
effectiveness of internal control design and implementation. This approach enhances system
completeness, standardization and process optimization, and further strengthens effective
implementation.
The Company strengthens its foundational safeguards through operational audits, identifies
and addresses risks through targeted special audits, and ensures closed-loop rectification
through continuous follow-up. As a result, leveraging insights from a single audit, we drive
compliance across the board and achieve organization-wide improvement, providing strong
support for high-quality development and risk prevention.
Operational management and special audits
Major fraud incidents
Sound Governance: Laying the Foundation for Sustainable Growth
Risk Hengyi continuously establishes a full-process, multi-level risk management system to
management
strengthen overall operational stability. We strictly manage key financial matters such as
investment, financing, and guarantees, and standardize approval procedures to mitigate
financial risks. To address commodity price volatility, we apply futures hedging to mitigate
market risk. For new projects, we implement tripartite supervision and conduct real-time
monitoring of environmental and safety indicators to ensure compliant operations.
The Company continues to strengthen a company-wide risk culture through targeted training
and emergency drills covering management, business units, and frontline operations. Overall
risk awareness and capability are further enhanced. We continuously improve institutional
frameworks, strengthen audit supervision, and precisely manage key risks to reinforce risk
defenses. As a result, operational risks remain well controlled, providing solid support for
sustainable development.
Business Anti-unfair competition
Ethics
The Company adheres to the principles of fairness and integrity, and strictly complies with
China's Anti-Unfair Competition Law and other relevant laws and regulations. We continuously
implement internal systems such as Anti-Money Laundering Regulations, the Code of Business
Conduct, Commercial Secret Management Measures, and Anti-fraud Guidelines. In all market
activities, we maintain a healthy and orderly competitive environment and firmly prohibit any
unfair competition practices that disrupt market order, safeguarding our reputation and long-
term development interests.
Anti-corruption and integrity
Hengyi has established an integrity culture guided by "honesty, transparency, and compliance,"
maintaining a zero-tolerance stance toward corruption. We regulate the exercise of power
through a sound internal control and supervision mechanism, combined with continuous
integrity education. In particular, for employees in key positions, we address both ideological
foundations and institutional processes to foster a clean and upright business environment.
The Company has formulated the Employee Integrity and Ethical Conduct Regulations and
continuously strengthens the integrity risk prevention system. Through process review and
full-process control, we strictly manage key procurement processes and enhance supervision.
We also improve the anti-fraud system and implement job rotation mechanisms to prevent
organizational stagnation, ensuring transparent, compliant, and efficient operations.
The Company actively conducts integrity activities and daily promotion. Through case sharing,
integrity culture building, and internal and external communication, we enhance employees'
awareness of integrity and promote a culture rooted in minds and actions. We are dedicated
to fostering a clean and upright working atmosphere to foster the defense line that employees
dare not, cannot, and do not want to be corrupt.
Hengyi Petrochemical Co., Ltd 2025 Environmental, Social, and Governance Report
Sharing integrity case studies
Integrity cases are posted monthly in elevator lobbies to educate and warn employees and suppliers through real-life
examples. During holidays, integrity notices are also issued on the procurement system homepage and internal OA
platform to strengthen employees' awareness of integrity red lines.
Strengthening integrity communication
In August, a visit was organized to the Zhejiang
Provincial Legal and Disciplinary Education The
In June, the Hangzhou Public Security Bureau was session featured firsthand accounts from officials
invited to deliver a special lecture business integrity who had committed disciplinary or legal violations,
and compliance awareness for employees and including both a "first-in-command" and a young
suppliers official.
In September, the Xiaoshan district procuratorate was
invited to conduct a special training on integrity and In October, an integrity-themed tea culture hiking and
compliance tea museum visit were organized
Anti-corruption & integrity training sessions held
Participants
Training hours
Sound Governance: Laying the Foundation for Sustainable Growth
Whistleblowing Hengyi attaches great importance to complaint and whistleblowing management, and has
mechanism
established a comprehensive, multi-tiered mechanism. We provide multiple public channels,
including email, telephone, and mailboxes, encouraging reporting of any solicitation or
acceptance of improper benefits. We strictly safeguard whistleblowers' privacy and safety,
establish a protection mechanism for whistleblowers, and treat all reporting materials
as confidential. Retaliation is strictly prohibited, and any violations will be subject to
accountability. Cases involving suspected illegal activities are referred to judicial authorities
.Through these efforts, we effectively protect whistleblower rights and enhance the credibility
of the reporting mechanism.
Public reporting channels：
Tel: 0571-83581890 (ext. 1890)
Email: fwb@hengyi.com
Fax: 0571-8279 7666
Party Leadership
Guided by Xi Jinping Thought on Socialism with Chinese Characteristics
for a New Era, Hengyi thoroughly implements the overall requirements for
Party building and the organizational line of the Party in the New Era. We
continuously optimize the "13446" Party-building mechanism and promote
an integrated model. Focusing on five dimensions—connection, linkage,
collaboration, refinement, and integrity—we explore new pathways for
the "Lian" framework. By enriching the "Upholding Original Aspiration,
Zhejiang University Party organization visits
Advancing Hengyi Worldwide" Party building brand, we empower high-
quality business development through high-quality Party building. Hengyi Research Institute for theme Party Day
activity
Party integration Organizational development
We enhance Party leadership through We continuously optimize organizational
the "Five Integrations" approach structures and strengthen the "three
by embedding Party building into teams" of Party secretaries, workers
development planning and extending on Party affairs, and Party members.
organizational coverage across the We also enhance the management
entire industrial chain. of floating Party members, while
standardizing the recruitment of Party
members.
Party education
We conduct in-depth thematic Party education centered on "strengthening confidence, boosting morale, enhancing
momentum, and promoting development." Leveraging platforms such as the "three meetings and one lecture" and
theme Party Day activities, we carry out regular theoretical learning, policy communication, and ideological guidance.
Furthermore, we focus on improving the relevance and effectiveness of this education, ensuring that responsibilities and
pressure are effectively cascaded across all levels.
Hengyi Petrochemical Co., Ltd 2025 Environmental, Social, and Governance Report
Quality First
Constantly Crafting Excellence
Hengyi upholds a "quality first" philosophy and fulfills its quality commitments through rigorous full-process control.
The Company implements responsible procurement by selecting compliant and high-quality suppliers, thereby ensuring
product quality at the source. We focus on high-performance and differentiated development, expanding a diversified
portfolio of advanced materials to meet evolving market demands. Guided by a customer-centered approach, we embed
quality management across production and operations and uphold standards rigorously in all details, earning customer
trust and market recognition through superior products and professional services.
Work safety Work safety management
The Company strictly complies with national laws and local regulations, including China's Work
Safety Law, and follows the principle of "safety first, prevention foremost, and comprehensive
management." We have established an HSE Management Committee, chaired by the Chairman
of the Board, and strengthened the implementation of the work safety responsibility system at
all levels. Each year, we convene HSE meetings and sign safety and environmental protection
target responsibility letters at every level. Our "one-vote veto system" for major accidents
ensures accountability is cascaded to departments, teams, and individual positions, leading to
a fully integrated and closed-loop safety responsibility system.
Contributions to UN SDGs
Quality First: Constantly Crafting Excellence
HSE management committee
It is responsible for the overall planning, guidance, and supervision of the Company's HSE
management. It studies, coordinates, and resolves major HSE matters, and convenes regular
meetings to monitor implementation, ensuring the effective operation of our HSE system.
HSE management committee office
Under the Safety and Environmental Protection Department, it is responsible for HSE
supervision and the implementation of the HSE management system. It organizes the
formulation and revision of corporate HSE policies and standards, and conducts HSE reviews
and performance assessments for all departments and subsidiaries.
HSE management department
It works to establish a robust safety management system and oversees its implementation, guides
subsidiaries in establishing sound safety management systems, organizes safety inspections, and
supervises the rectification of identified risks and issues across subsidiaries.
Subsidiaries
Each subsidiary establishes an HSE leading group and continuously improves its safety management system. It develops
and implements work safety responsibility systems and management measures, sets and executes safety objectives and
actions, and fulfills its primary responsibility for work safety management.
The Company strictly implements internal policies and operating procedures, including the Safety and Environmental Protection
Assessment Measures and Special Operations Management Regulations, to prevent and reduce work safety incidents. In 2025,
we continued to strengthen our work safety standardization system and worked to establish a long-term safety management
mechanism. As of the end of the reporting period, 5 subsidiaries had obtained Level three certification in work safety
standardization, achieved Level 2, and passed Level 1 certification in road transportation safety standardization.
Case
Zhejiang Yisheng advances the development of safety informatization system
Zhejiang Yisheng, a subsidiary of Hengyi, established a
Process Safety Management (PSM) system to comprehensively
enhance digital safety management capabilities. In 2025,
the PSM system integrated with the Intelligent Safety Risk
Management Platform of the Qingzhi Chemical Industry Park
in Beilun District. Through this connection, critical data—
including safety information, special operation permits,
and personnel positioning—were successfully uploaded.
Additionally, the process alarm optimization system
was implemented. In addition, we continued to engage 2D safety visualization platform
external experts to conduct PSM enhancement training,
further strengthening safety management capabilities at all
organizational levels.
Hengyi Petrochemical Co., Ltd 2025 Environmental, Social, and Governance Report
Safety risk Hengyi has thoroughly implemented the national Three-Year Action Plan for Addressing the Root
control
Causes of Work Safety Risks . We are fully advancing the digitalization of the dual prevention
mechanism, which integrates tiered risk management with hazard identification and governance.
By conducting multidimensional risk identification across equipment and working environments,
we have established a "four-color risk distribution map" to enable targeted control of high-risk
areas. Concurrently, we employ a dynamic risk assessment mechanism to regularly update the risk
database ensuring all risks remain under control.
Regarding hazard investigation and governance, the Company has established a three-tier
mechanism comprising group-level supervision, subsidiary self-inspection, and expert-assisted
inspection. We conduct targeted inspections on critical areas such as fire protection systems and
machinery hazards. For identified hazards, we have developed a hazard inventory checklist, prepare
rectification plans, and implement a "closed-loop tracking system" to ensure all identified hazards
are fully rectified.
Safety inspections held Hazards identified Rectification completion rate
Safety Hengyi has established an Emergency Command Center
emergency
led by the Chairman as Chief Commander and continues to
management
strengthen our emergency response teams. We strictly adhere
to the Emergency Incident Response Procedures to enforce
our emergency protocols, outlining operational standards
for the four phases of early warning, response, containment,
Safety emergency drills held in
and recovery. A "one-hour reporting mandate" has been
total
implemented to ensure that all emergencies are reported to the
emergency command center within one hour of occurrence,
thereby enhancing rapid response and coordinated handling
capabilities. Apart from a "1+N" integrated emergency response 19,358
framework, and specialized emergency plans, we design Participants
emergency response cards and on-site emergency response
procedures for key positions. Regular practical simulations
and comprehensive emergency drills are conducted, to ensure
timely and effective emergency response, with a focus on
hazard identification, emergency response, and evacuation.
RMB 142.83 million
Invested in work safety
Safety culture The Company integrates a culture of work safety into its
development
corporate DNA. While delivering comprehensive and multi-
level safety education and training, we leverage multiple
communication channels, including safety culture walls, safety
management manuals, and daily safety tips disseminated via
the official WeChat account. Meanwhile, rolling safety alert
videos are displayed on workshop digital screens. Through
these efforts, we reinforce work safety practices, enhance
organization-wide safety awareness, and foster a robust safety
culture.
Quality First: Constantly Crafting Excellence
Safety training per trainee
(non-hazardous chemicals) (hazardous chemicals) Safety training Pass rate of safety Participants of three-
sessions held training level safety training for
new hires
Conducting themed training on Live online training: Fire safety for Fujian Yijin conducting HSE training
"Safety Awareness and Emergency industrial enterprises
Responses across the Workforce"
Chemical Hengyi strictly complies with laws and regulations such as the Work Safety Law, the
safety
Regulations on the Safety Management of Hazardous Chemicals, and the Catalogue of
management
Hazardous Chemicals. We systematically identify and assess chemicals involved in materials
and production processes, thereby enhancing our intrinsic safety levels.
Major chemical leaks and
other safety incidents
occurred
Safe Storage of Chemicals
Hengyi Petrochemical Co., Ltd 2025 Environmental, Social, and Governance Report
Chemical lifecycle safety management
The Company has established a comprehensive chemical safety management framework, including the Chemical Management
Procedures, the Chemical-Specific Safety Risk Checklists , and the Safety Data Sheets for Hazardous Chemicals . Accordingly, we
continue to strengthen safety management across the full lifecycle of chemicals, covering procurement, storage, use, transportation,
and disposal.
Chemical
Suppliers must possess a Hazardous Chemical Business License and provide compliant MSDS
Procurement (Material Safety Data Sheets) and product safety labels.
Management For first-time cooperative suppliers, on-site audits of storage conditions and transportation
capabilities are required.
Chemical procurement applications submitted through the ERP system must be countersigned by
the HSE department.
Purchase of unassessed substances not listed in the Chemical Registration List is prohibited.
Segregated storage?：
Chemical
Storage Store by physicochemical properties (e.g., flammables in explosion-proof cabinets, corrosives in
Management isolated areas); incompatible substances must be strictly separated (e.g., acids and bases, oxidizers
and reducers shall not be mixed).
Storage conditions?：
Warehouses equipped with temperature/humidity monitoring, ventilation systems, and leak
containment facilities (e.g., berms, absorbent sand); maximum storage capacity shall not exceed
In/out registration：
Dual-person, dual-lock management; record in/out time, quantity, and receiver; regular inventory
to ensure accuracy; MSDS available; strict usage recording.
Chemical Use
Operators must receive specialized training and wear PPE such as safety goggles and chemical
and Handling resistant gloves.
Highrisk operations (e.g., repackaging, heating) require a work permit and dedicated supervision.
Chemical waste disposal: classify waste liquids, empty containers, and packaging; affix hazardous
waste labels (including composition and hazards); entrust disposal to licensed companies; retain
transfer manifests for at least 5 years.
Discharge of waste into sewers or mixed storage is prohibited.
Emergency spill kits (absorbent pads, neutralizers) shall be placed nearby.
Internal transfer?：
Chemical
Transportation Use explosion-proof forklifts or dedicated carts; avoid crowded areas; check container sealing; affix
Management "Handle with care" labels.
External transport?：
Carriers must have dangerous goods transport qualifications; vehicles equipped with GPS and
emergency equipment; accompany with "one book, one label" (MSDS, safety label) and transport
emergency card.
Chemical Disposal
Disposal and transport by qualified companies.
Dispose of waste chemicals in accordance with regulations to avoid environmental pollution.
Quality First: Constantly Crafting Excellence
Chemical phase-out and substitution
The Company prioritizes source control in chemical management. We conduct comprehensive Hazard and Operability Analysis
(HAZOP), Safety Integrity Level (SIL) verification, and reaction risk assessments to accurately identify potential chemical safety
risks. Based on the results, we establish a dynamic risk classification and tiered control list and connect all major hazard sources
to the National Monitoring and Early Warning System Version 3.0 for real-time risk monitoring. Furthermore, we re-conduct safety
assessments whenever changes occur in processes, raw materials, or equipment, and execute the "three simultaneities" review for
safety facilities (ensuring the simultaneous design, construction and operation of safety facilities with the main projects) to fortify
our safety defense at the source.
In addition, the Company actively advances the phase-out and substitution of chemicals and strictly complies with the national
phase-out catalogue. We have decommissioned outdated installations and high-risk storage tanks and established a long-
term mechanism for the evaluation and phased withdrawal of obsolete facilities. High-risk equipment that fails to meet safety
requirements is subject to rectification within a specified timeframe or mandatory elimination. We also actively promote green
and safe substitution by replacing hazardous chemicals with low-toxicity, non-toxic and eco-friendly alternatives, achieving
coordinated improvements in both process safety and environmental performance.
Contractor safety management
The Company has formulated the Contractor Safety Management Measures to standardize and regulate contractor admission
review, process supervision, performance evaluation, and exit management. In terms of safety qualification review, contractors
must submit business licenses, work safety permits, and special operation personnel qualifications. For high-risk operations
such as working at heights and in confined spaces, specialized construction plans and emergency response plans are required.
Concurrently, we sign Work Safety Management Agreements with contractors clearly and defining risk deposit standard.
Additionally, to strictly control outsourced safety risks, we enforce a contractor blacklist system, blacklisting any contractor
involved in safety accidents or concealing hazards and prohibiting cooperation for three years. We also hold monthly contractor
safety meetings and regularly organize dedicated safety inspections for contractors to ensure workplace facilities meet safety
requirements.
Zhejiang Yisheng: On-site safety training for contractor personnel
Hengyi Petrochemical Co., Ltd 2025 Environmental, Social, and Governance Report
Product The Company strictly complies with the Product Quality Law and other applicable laws,
Quality
regulations, and industry standards. In line with ISO 9001 and other management system
Management
requirements, we continue to improve a comprehensive quality management system,
standardizing full-process product quality control and effectively preventing quality risks.
As of the end of the reporting period, the Company has obtained the EU OEKO-TEX Class I
certification, guaranteeing that hazardous substances and heavy metals remain within limits in
compliance with international environmental standards. In addition, we conduct screening and
testing for Substances of Very High Concern (SVHC) in accordance with the REACH Regulation
to ensure that products are free from harmful substances.
Subsidiaries certified to ISO 9001 quality management systems
Pass rate of outgoing inspection
Quality The Company integrates product quality control throughout all stages of manufacturing. We
management
adhere to the Internal Quality Control Standards for Chemical Fiber Products, Management
process
Measures for Product Complaints and Quality Incidents, Technical Standards for Raw and
Auxiliary Materials, and Finished Product Protection Measures for Polyester Plants. We establish
clear requirements for strict control over the physical properties of chemical fiber products.
Concurrently, we track, spot check, and manage quality metrics to ensure that our products
remain under control and meet customer expectations for high quality.
Raw Develop acceptance standards for raw and auxiliary materials; inspect all
material incoming materials upon arrival. The Company has also established an
quality
control
exclusive OA process "D1014 – Quality Feedback for Procured Materials" to
promptly address abnormal raw material feedback.
In-process Build a big data platform：each factory maintains a data ledger and uses
quality on-site dashboards to monitor process control, strictly managing product
control quality stability.
Non-
conforming
Establish a "Non-conforming Product Feedback Process" and "D0941 –
product
Product Quality Evaluation Process" to timely evaluate abnormal quality
output products, segregate and sell them separately, and control the release of
control non-conforming products.
Quality First: Constantly Crafting Excellence
Quality culture The Company is committed to deepening its quality culture. Through regular audits
of our quality management system, diversified specialized technical training, the
sharing of QC group achievements, and internal skills competitions, we strengthen
quality awareness.
Case
Hengyi launches its first Quality Month initiative
In September 2025, the Company launched its first Quality Month under the theme "Strengthening the Quality
Foundation and Building the Hengyi Brand Together" to consolidate company-wide quality consensus. We leveraged
new media, digital screens, banners, and visual displays to create an immersive atmosphere. Concurrently, we
conducted quality management training, knowledge competitions, achievement exhibitions, specialized skills contests,
and signature campaigns alongside the release of a "Quality Initiative Proposal." These activities significantly enhanced
employee engagement and responsibility, integrated quality concepts into daily operations, and drove continuous
improvements in product quality and process control.
Jiaxing Yipeng skills competition Zhejiang Yisheng skills competition
Haining Hengyi skills competition Shuangtu skills competition
Hengyi Petrochemical Co., Ltd 2025 Environmental, Social, and Governance Report
Precise The Company adheres to a customer-centered approach and continuously improves
Customer
customer satisfaction through a robust after-sales service system and a comprehensive quality
Service
management system. We have established customer complaint channels, such as Hengyi
Micro Mall and the 400 hotline, to ensure efficient handling and resolution of complaints,
and promptly provide technical support and responsive services. In 2025, we distributed the
Product Satisfaction Questionnaire via Hengyi Micro Mall, which showed a 99% customer
satisfaction rate according to 2,275 completed questionnaires.
Micro mall customer satisfaction survey
Responsible The Company is committed to building a transparent, efficient, and collaborative sustainable
Supply
supply chain system. We continuously improve full life-cycle supplier management, deeply
Chains
implement responsible procurement principles, and support supplier development. We also
promote supply chain resilience and sustainable development, working with upstream and
downstream partners to jointly build a sustainable ecosystem.
Supplier The Company has established a supply chain management system covering the full life cycle
management
of suppliers, enabling end-to-end management from onboarding, evaluation to exit. We have
formulated a series of supplier management policies and procedures. These include Measures
for the Quality Management of External Suppliers, Supplier Admission Requirements, Measures
for Supplier Inspection, Measures for Supplier Flight Inspection Management, and Regulation
on Supplier Admission Management. We rely on the Supplier Relationship Management
(SRM) system to standardize key processes such as supplier onboarding and evaluation. This
approach establishes a scientific and well-structured supplier management system to ensure
stable supply support for corporate development.
Suppliers in total Newly admitted suppliers On-site inspected suppliers
Quality First: Constantly Crafting Excellence
Supplier full life-cycle management process
The Company conducts tracking, review, and evaluation of suppliers in terms of business qualifications,
supply capacity, corporate strength, production equipment and capacity, product quality, and
environmental compliance.
Supplier Supplier quality management system, environmental management system, occupational health and safety
onboarding
management system, environmental impact assessment results, and pollutant discharge permit status are
incorporated into bidding qualification requirements.
On-site inspections are conducted for suppliers, and an evaluation scoring mechanism is introduced.
Suppliers are required to submit inspection reports to ensure compliance and transparency.
The Company signs the Anti-Commercial Bribery and Integrity Agreement and the Sunshine
Procurement Agreement with all formal suppliers to ensure open, fair, and just procurement. Supplier
engagement
At the time of contract signing, supplementary agreements must also be signed to specify requirements
in employment, environment, and integrity compliance.
The Company conducts regular supplier performance evaluations and assessments, and classifies and
Supplier
incentivizes suppliers based on evaluation results.
evaluation
Suppliers are invited to complete the Supplier Sustainability Self-Assessment Questionnaire periodically
to dynamically evaluate supplier performance.
The Company implements routine unannounced spot checks and comprehensive evaluations of
suppliers. For suppliers with poor performance evaluations or causing significant economic losses Supplier
during cooperation, we apply measures such as warnings, notifications, suspension of trading exit
qualifications, or even termination.
Qualification certification (10 points)：including business license, tax information,
financial condition, agency/authorization qualifications, ISO 9001 Quality Management
System certification, and ISO 14001 Environmental Management System certification.
Production capacity (70 points)：covering six aspects, including major production
equipment level, production processes, capacity status, and workforce allocation.
Performance (20 points)：evaluated based on historical cooperation scale and
Supplier On-
site inspection
contract fulfillment performance.
scoring criteria
Bonus items (8 points)：including design and R&D capabilities, national-level new
product and new technology certifications, invention patents, national laboratories,
and information systems such as ERP, SAP, MES, and warehouse management systems.
Hengyi Petrochemical Co., Ltd 2025 Environmental, Social, and Governance Report
Responsible The Company upholds a responsible procurement philosophy and integrates sustainability
procurement
requirements across the entire supply chain management system. We actively promote green
and transparent procurement. Through standardized and transparent procurement operations,
we work with suppliers to jointly fulfill social responsibilities and build a green, compliant, and
sustainable responsible supply chain ecosystem.
Green Procurement Sunshine Procurement
Advocate that suppliers use Emphasize anti-fraud work ; sign Anti-Commercial Bribery and Integrity Agreement
clean fuels and production with suppliers and procurement personnel, prohibiting any form of corruption or
equipment that minimize bribery.
environmental impact ;
Establish a regular integrity awareness mechanism: weekly integrity education
encourage suppliers to
sessions for all employees; each month, select typical integrity warning cases and
consider environmental
post them near elevator entrances, encouraging suppliers to proactively read and
and social aspects when
comply.
providing products and
services. Conduct special integrity education activities for management, procurement
personnel, and suppliers to strengthen integrity awareness.
Provide threefold incentives (spiritual honor, cash reward, performance bonus) for
procurement personnel who report verified misconduct.
The Company has established a complaint feedback platform. The official complaint hotline
of the audit and legal department is uniformly displayed across multiple channels, including
the Sunshine Procurement Agreement, bidding documents, relevant contract clauses, and
procurement desk signage. This ensures that complaint channels are open, transparent, and
accessible. We promptly follow up, handle, and respond to all received complaints.
Complaint hotline:0571-8358 1890
Complaint email: fwb@hengyi.com
Engineering Company signing annual integrity agreement to clarify integrity responsibilities
Quality First: Constantly Crafting Excellence
Supplier The Company focuses on long-term supply chain development and is committed to building
empowerment
a stable, collaborative supplier base. By implementing a system of recognition and rewards,
we aim to instill a sense of honor among our suppliers, thereby strengthening their loyalty and
engagement. Additionally, we have standardized communication channels by implementing
a process for documenting and disclosing supplier interviews. All interview records are fully
archived and incorporated into the supplier information database, thereby solidifying the
data foundation of supplier management. In 2025, we conducted three rounds of systematic
supplier interviews, covering 158 partner suppliers. We gathered comprehensive feedback
on collaboration workflows and service support to continuously improve our management
system and enhance supply chain efficiency.
Case
Hengyi held the 2025 annual outstanding supplier award ceremony under the theme "Joining Hands with Hengyi for
a Win-Win Future," with separate venues at the Hengyi headquarters and Guangxi Hengyi. A total of 65 outstanding
suppliers and over 120 corporate representatives attended the conference to strengthen partnerships and explore
collaborative development. The ceremony recognized core suppliers of the Company as well as outstanding suppliers
supporting major projects in Guangxi, expressing gratitude for their strong support in quality assurance, cost
optimization, and project execution. Together, we are building a mutually beneficial, long-term, and reliable value
ecosystem.
Hengyi Petrochemical Co., Ltd 2025 Environmental, Social, and Governance Report
Tech-Driven Leadership
Charting a New Course in Smart
Manufacturing
Hengyi places technological innovation at the core of its growth strategy, with increasing R&D investment in green chemicals
and advanced materials while driving industrial application. We are accelerating our strategic shift from an industrial leader
to an innovation-driven enterprise with global influence, setting the pace for industry-wide technological progress.
Innovation Talent base enhancement
Activation The Company pursues a talent-driven and innovation-led enterprise strategy,
boosting R&D investment and talent recruitment. We have built a full-cycle talent
development and incentive system supported by deeper industry-academia-
research collaboration, laying a strong talent base for technological innovation
and highquality growth. For core R&D personnel, we have introduced a long-term
tenure system and established dedicated promotion pathways that integrate
professional title evaluation with career advancement. This system now covers the
top 2% of our research workforce and has significantly improved retention of key
talent. We partner with Zhejiang University and Donghua University on targeted
doctoral programs for in-service employees. Furthermore, a project-based profit-
sharing mechanism motivates R&D teams by aligning individual contributions with
shared outcomes.
RMB 889.35 million 16.45 % 1,421+ 120 185
R&D investment Year-on-year increase R&D personnel, including Doctoral degree Master's degree holders
holders
Honor
"Development of novel titanium composite catalysts and complete technology for antimony-free eco-friendly
polyester production" won the First Prize of the Zhejiang Provincial Science and Technology Progress
Award.
Contributions to UN SDGs
Tech-Driven Leadership: Charting a New Course in Smart Manufacturing
Green product The Company continues to develop green products, and has launched Eticont eco-friendly
innovation
polyester, Petale biodegradable materials, and chemically depolymerized products recovered
from post-consumer textile waste. These products improve environmental performance and
resource efficiency, driving a low-carbon upgrade across the industrial chain and sharpening
our competitive edge in green innovation.
Eticont, developed by Hengyi Research Institute under the Company, stands as a polyester product
with full proprietary rights. Eticont uses a full titanium composite catalyst system to replace heavy
metal antimony catalysts, addressing the long-standing issue of water and soil pollution associated
Eticont with antimony catalysts in traditional polyester production. This eco-friendly, green, and health-
conscious product achieves green circulation throughout the textile product lifecycle. In 2025, its
application accelerated, and it was listed as a core promotional direction for the Company's green,
high-value-added products.
Petale introduces "degradation factors" into the molecular structure, achieving biodegradation in
Petale
industrial composting environments and solving the environmental problem of difficult-to-degrade
traditional polyester. It passes the GB/T 19277.1 test, with a relative biodegradation rate exceeding
We have successfully developed a chemical depolymerization technology for recycling post-
Recycled consumer textile waste. The resulting products match the quality of virgin polyester and can be
Materials
from Waste
processed into recycled polyester chips and fibers, primarily for apparel and home textiles, achieving
Textiles closed-loop R&D from textile waste to new materials. In 2025, we invested in building a 300,000-ton-
per-year recycled new materials industrial demonstration project in Jingzhou, Hubei Province.
Hengyi Petrochemical Co., Ltd 2025 Environmental, Social, and Governance Report
PTT composite elastic fiber is produced through bicomponent spinning of PET and PTT polymers
PTT
using bio-based PDO, resulting in an eco-friendly fiber. The differential shrinkage between PET and
Composite
Fiber
PTT creates permanent helical crimps that provide inherent elasticity, and PTT's three-dimensional
molecular spring structure ensures exceptional recovery properties.
We focus on the technical bottleneck of the matting agent in the application of Nylon 6, and we have
partnered with Donghua University to create innovative production processes. We have successfully
TiO2 Matting
developed the green manufacturing of TiO2 matting agent for Nylon and complete set of technologies
Agent for for industrialization of Fully Matte Nylon. Our product outperforms imported alternatives in key
Nylon metrics, breaking long-standing foreign technology monopolies and reducing raw material costs for
domestic nylon producers. This advancement accelerates the sustainable, high-quality development
of China's synthetic fiber industry.
Flame- Copolymerized flame-retardant polyester offers stable, long-lasting, and excellent flame retardancy,
Retardant good hand feel and appearance, wash resistance, eco-friendliness, and non-toxicity. The fabric
Polyester reaches B1 level according to GB8624-2012, with a limiting oxygen index above 32%.
Stain-resistant PA6 stands out as a unique product developed with full proprietary rights by Hengyi
Research Institute. Addressing the pressing market demand for domestic stain-resistant nylon fabrics,
Stain- Hengyi embarked on the "key technology and industrialization project for stain-resistant PA6". This
resistant project has led to an independently developed novel stain-resistant agent through formula design,
PA6 optimized polymerization processes, and upgraded polymerization equipment. Consequently, we
manage to produce in-situ polymerized stain-resistant PA6 slices. Fabrics crafted from these slices
offer permanent resistance to acidic dyes, eliminating the need for additional surface treatments.
Tech-Driven Leadership: Charting a New Course in Smart Manufacturing
R&D The Company focuses its R&D on green and high-value solutions across five areas:
commercialization
materials, chemicals, recycling technologies, green processes, and overseas projects.
We are accelerating the translation of R&D outcomes into commercial applications to
support our green transformation and global expansion.
Materials
We are deeply engaged in green and functional materials, with core products holding
a leading market share. A number of high?performance materials and green chemicals
have entered pilot and industrialization stages, and biodegradable materials have
advanced to industrialization and market promotion stages.
Coal-to-chemicals and Brunei projects Chemicals
We are addressing key technology We are promoting the industrialization of
challenges in catalyst and purification catalysts, matting agents, spin finishes,
technologies for coal-to-chemicals masterbatches, and other auxiliar y
operations and the Brunei Phase II agents, while concurrently developing
refining project. A full series of R&D high?performance monomers and green
projects has been initiated to provide bio-based monomers.
technology support for our overseas
operations.
Green processes Recycling technologies
Our proprietary hydrogen peroxide fluidized- W e h a v e a c h i e v e d a b rea kt h ro u g h
bed unit has been commissioned in Guangxi, in chemically depolymerizing post-
using green technology to reduce carbon co n s u m e r text i l e wa ste to re co v e r
emissions and improve efficiency and ensure p o l y e ste r m o n o m e r s . P i l ot te st i n g
compliant operations. has been successfully completed, and
the technolog y is now moving into
commercial deployment, creating a high-
quality closed-loop recycling system for
textile waste.
Case
Guangxi Hengyi New Material project launched — Technological innovation empowers the full industry chain
In October 2025, Phase I of the Guangxi Hengyi 1.2-million-
ton-per-year integrated caprolactam-polyamide project
achieved full-process integration and entered trial production.
The project incorporates multiple proprietary green and
low-carbon patented technologies, combining advantages
in technolog y, integration, and product mix. In close
collaboration with the Brunei refining project, it strengthened
downstream capabilities and enhanced value creation across
the full refining-chemicals-fiber chain, driving the industry
toward higher-end, smarter manufacturing.
Hengyi Petrochemical Co., Ltd 2025 Environmental, Social, and Governance Report
Digital and The Company is steadily advancing its digital and intelligent transformation in step with
Intelligent
broader technology trends, while exploring innovative AI applications in marketing. Built on
the Hengyi Brain platform, we have created an integrated visual operations platform combining
Development
online trading, financial services, and warehouse logistics, improving operational efficiency
and management effectiveness. We are also accelerating deploying digital tools in project
management, business secret protection, and records management to streamline workflows,
strengthen data security, and expand intelligent applications. Our efforts fuel innovation and
high-quality growth with strong digital and intelligent support
AI-powered marketing assistant
The AI-powered marketing assistant serves as a key enabler of data-driven marketing. Through
natural language interaction, it responds to data queries in real time, rapidly extracting key
metrics and analytical insights to help marketing teams grasp sales trends and customer
behavior, enabling them to move quickly from data to action. The assistant also performs
in-depth, multi-dimensional data analysis to build precise customer profiles, shifting our
marketing approach from broad outreach to targeted engagement with tailored solutions that
improve customer satisfaction and loyalty.
IPR The Company enforces its Intellectual Property Management Policy and Business Secret
Protection
Protection Management Policy and works to establish a sound intellectual property rights(IPR)
and trade secret protection system. Dedicated IPR specialists are embedded in project teams to
manage patent strategy throughout the R&D process. We strengthen closed-loop management
of R&D records and strict controls over confidential information to prevent infringement and
leakage risks.
We prioritize high-quality patent creation and standards leadership, and are actively cultivating
patent-dense products to grow the scale and quality of our proprietary IPR portfolio. Through
structured, professional management, we protect our innovation outcomes and support
technological innovation and industry compliance.
Tech-Driven Leadership: Charting a New Course in Smart Manufacturing
As of the end of 2025
Valid granted patents granted in total, including R&D patents Intelligent manufacturing patents
Honor
Post-consumer textile waste recycling technology was included in the 2025 High-Value Patent Development List.
Industry The Company deepens industr y-academia-research collaboration with a focus on
Collaboration
commercializing research outcomes and addressing industry challenges. We deepen our
partnerships with Zhejiang University, Donghua University, and other leading universities, and
have established regular exchange mechanisms such as the Hengyi Chair Professor and Hengyi
Scholars programs. Under a "company-led challenges, university-developed solutions" model,
we jointly tackle key technology challenges. A dedicated foresight research office is in place to
coordinate university-enterprise cooperation, work with sales and product development teams
and engage external experts to provide technical guidance. Several frontier technologies have
been advanced to pilot testing. The integrated approach accelerates research commercialization
and fosters an open, collaborative innovation ecosystem.
National and provincial-level research projects undertaken
Standards developed or revised as a contributor, including
National standards
Industry standards
Group standards
Case
Partnering with Huading to advance nylon value chain technology
In February 2025, Hengyi Research Institute signed a
strategic cooperation agreement with Yiwu Huading
Nylon Co., Ltd. to collaborate across the full value chain
on advanced technologies including Easy-Clean PA6.
Leveraging award-winning research, the partnership
is jointly advancing functional fiber R&D, market
development, and commercialization to drive green
upgrading and value creation in the nylon industry and
accelerate the transformation of R&D outcomes .
Hengyi Petrochemical Co., Ltd 2025 Environmental, Social, and Governance Report
Shared Growth
Advancing Together Towards
a Sustainable Future
Part Two
Contributions to UN SDGs
Chairman’s Statement
Hengyi recognizes that business growth is inseparable from the well-being of the
communities we serve. We pursue high-quality development guided by a commitment to
giving back to society. Green and low-carbon development is integral to how we operate.
We continue to deepen green production and low-carbon transformation to protect our
shared home by fostering harmony between industry and nature. We invest in our people
by building development platforms and support systems that enable every employee to
grow alongside the Company. We contribute to a better society through public welfare
initiatives and engagement in the Belt and Road development. Together with our partners,
we are building a more sustainable and better future-in harmony with the environment,
people, and society.
Green and Low-Carbon Practices Embracing Ecological Harmony 40
People-Centric Approach Building a Talent Powerhouse 52
Community Engagement Bringing Warmth and Better Livelihoods 60
Hengyi Petrochemical Co., Ltd 2025 Environmental, Social, and Governance Report
Green and Low-Carbon Practices
Embracing Ecological Harmony
Hengyi upholds the principle that "lucid waters and lush mountains are invaluable assets,"steadfastly pursuing a path of
ecological priority and green, low-carbon, high-quality development. The Company integrates efforts to reduce carbon
emissions, mitigate pollution, expand green transition and promote growth, while accelerating the implementation of
carbon peaking and carbon neutrality("dual carbon" for short). We continue to optimize our energy mix, deepen clean
production and circular resource use, and build our "Green Hengyi" competitive edge. By driving green transformation
across the entire value chain, we are making green a defining feature of our high-quality development.
Circular
Economy
Hengyi focuses on high-value recycling of post-consumer polyester textiles and explores
circular economy practices. The Company has independently developed the "Yi Recycling"
platform, which leverages chemical recycling technology to establish a collection network
spanning urban and rural areas, achieving fiber-to-fiber closed-loop recycling.
Biochemical recycling for resource circulation
Unlike conventional mechanical recycling, "Yi Recycling" draws on chemical recycling technology developed by Hengyi
Research Institute to create a complete regeneration pathway from post-consumer textiles to new textile products. After
sorting, discarded garments are processed into high-end green recycled materials at circular economy parks using eco-friendly
processes. These materials are then regenerated into polyester fiber and other green fibers for reuse in textile production,
closing the resource loop.
Recycled Recycled
Cotton Fibers Spandex or
Polyether
Made into
Polyols 融化成循环新
Melted into
材料液体
recycled new-
recycled cotton
yarn or bio- Made into
based polyester recycled spandex material liquid
/ polyetheramine
Polymerized into Made into
Waste Textiles recycled PET recycled POY, FDY,
chips and DTY yarns
Depolymerized
解聚循环新材
Recycled Recycled
Polyester Fibers into recycled
料晶体 new-
Nylon Fibers
Made into high- material crystals
Made into performance
recycled nylon materials
Contributions to UN SDGs
Green and Low-Carbon Practices : Embracing Ecological Harmony
Building a recycling network linking consumers to industry
Through an innovative model combining government guidance, corporate leadership, and industrial chain collaboration,
Hengyi has built an omni-channel collection system that combines digital services with physical networks. The offline network
integrates service stations, supply and distribution system, and government resources across multiple provinces to establish a
physical network covering both urban and rural areas:
"Yi Recycling" entered into a strategic cooperation with the Henan Renewable Resources Industry Association. Leveraging the
association's industry resources, as well as Yihuishou's technological strengths and operational experience, both sides will
drive the transformation of Henan's waste textile industry from basic recycling to refined and high-value utilization
"Yi Recycling" entered into a strategic agreement with the Yueyang Municipal Government. Under this agreement, Yi Recycling
will systematically build a multi-category textile collection network in Yueyang and establish a regional sorting facility in
Huarong County. The Company is also partnering with Anta Kids to advance a school uniform industry project in Yueyang.
"Yi Recycling" established business cooperation with the Zhejiang South region of SF Yishoufa. By empowering end courier
stations with waste textile recycling capabilities, the two parties help hundreds of Yishoufa stores in Zhejiang South boost
revenue and pursue green development. Comprehensive cooperation in the Zhejiang Central region is also advancing rapidly
"Yi Recycling" in collaboration with CITIC Bank Xiaoshan Sub-branch, launched the "Old Clothes Renewed, Green Together"
waste textile recycling campaign. By harnessing financial sector support to empower green and low-carbon development, the
initiative pioneers a new model for banking institutions to put sustainable, low-carbon practices into action.
Solving last-mile recycling challenges
Online, the Yi Recycling WeChat mini-program offers one-click booking and door-to-door courier pickup, improving collection
efficiency while turning each collection point into a micro-hub for the circular economy:
"Yi Recycling" has officially launched within the Company, on university campuses, and in residential communities. The public
can bring unwanted textiles, including clothing, shoes, bags, plush toys, curtains, rugs, and cushions, to designated collection
events. Participants receive cash or gifts in return, experiencing firsthand how waste becomes a resource and building lasting
recycling habits.
"Yi Recycling" launched the"Recycle Together, Love Never Idles"Green Campus Relay initiative. All proceeds from the campus
collections were donated to the Rui'an Disabled Persons'Federation to support welfare programs for people with disabilities,
creating a complete loop of resource recycling and community giving.
Honor
"Yi Recycling" was appointed Vice-Chairman Unit of the
China Resource Recycling Association.
Green Home Warm Recycling Initiative
Hengyi Petrochemical Co., Ltd 2025 Environmental, Social, and Governance Report
Green Campus Relay Initiative
Sorting and Waste
Recycling
disassembly textiles
Eco-friendly
The remarkable journey of a used garment
chemical
purification
Sorting warehouses nationwide
Located in circular economy parks
Textile
Technology sourced from Hengyi Research Institute
gold
BHET
Recycled
green
fibers
Easy processing
Textile High quality
manufacturing High durability
New
textiles
reborn
Spinning to produce yarn
Recycling 1 kg of waste textiles Weaving to produce greige fabric
saves 6,000 L of water and
Dyeing and finishing to produce finished fabric
reduces 3.6 kg of carbon
emissions
Eco-friendly and safe, sustainable
and circular
Green and Low-Carbon Practices : Embracing Ecological Harmony
Climate Change
In response to the opportunities and challenges posed by climate change, Hengyi
Response
actively aligns with China's carbon peaking and carbon neutrality strategy and
continues to strengthen its climate response framework. Guided by the Carbon
Peaking Action Plan, the Company carries out carbon reduction initiatives,
advances energy conservation, and expands into the development and utilization
of clean energy. We are accelerating our transition to a green, low-carbon industrial
structure while enhancing our low-carbon management capabilities.
Tighter carbon The Company has fully integrated climate-related matters into its ESG management
emissions
framework. The Board of Directors oversees the development and execution of
management
climate strategy and targets. The HSE Management Committee is responsible
for coordinating and advancing carbon management across the organization.
It has established a carbon management system centered on carbon intensity
control, supplemented by total emissions control. The Committee coordinates and
supervises carbon emissions management across all departments, providing the
organizational and institutional foundation needed to deliver on the Company's
"dual carbon" goals.
Carbon Emission Reduction Targets 2025 Annual Progress
Using 2025 as the baseline year, the company aims to limit the increase Total carbon emissions in 2025: 7.99 million
in Scope 1 and Scope 2 carbon emissions to within 25% by 2030. tons.
The Company advances its carbon peaking and carbon neutrality work The Company continues to implement
in a strong, orderly, and effective manner, clarify its goals and tasks, carbon reduction measures, including the
accelerate the green transformation of production and lifestyles, and use of clean energy, innovation in low-carbon
promote economic and social development based on efficient resource products and technology research and
utilization and green, low-carbon development, so as to ensure the development, optimization of production
achievement of carbon peaking by 2030 and carbon neutrality by 2060 equipment and processes, carbon
as scheduled. accounting, and carbon emissions trading.
Amount and intensity of carbon emissions 2025
Total CO2 emissions (million tons) 7.99
Total Scope 1 CO2 emissions (million tons) 6.31
Total Scope 2 CO2 emissions (million tons) 1.43
Total Scope 3 CO2 emissions (million tons) 0.25
Intensity of CO2 emissions (million tons/RMB billion) 0.07
Green Electricity Trading Volume (10,000 kWh) 51,015
Green Certificates Purchased (10,000 certificates) 40
*Note: Hengyi carbon dioxide emissions increased year-on-year in 2025, mainly due to the commissioning of Phase I of the 1.2
million-ton-per-year caprolactam–polyamide integrated industrial project by its subsidiary Guangxi New Materials Company in
October 2025, which added new production facilities and production capacity.
Hengyi Petrochemical Co., Ltd 2025 Environmental, Social, and Governance Report
Case
Contributing to ASEAN climate strategy dialogue for Brunei's low-carbon development
On June 23, 2025, Hengyi Industries Sdn Bhd (Hengyi Brunei, or Hengyi Industries) was invited to attend the
Brunei's National Workshop on the ASEAN Climate Change Strategic Action Plan (ACCSAP) 2025–2030, hosted by
Universiti Brunei Darussalam (UBD). Company representatives participated in panel discussions, offered expert
recommendations aligned with Brunei's national climate priorities, and formally submitted a stakeholder feedback
form. Through this high-level policy dialogue, Hengyi Brunei voiced its support for low-carbon transition and green
development. The engagement also deepened the Company's understanding of emerging climate policies across
ASEAN and Brunei, strengthening its climate governance and low-carbon planning capabilities to better contribute to
regional climate action and local sustainable development.
Hengyi Brunei attended the Brunei National Workshop on the ASEAN Strategic Action Plan on Climate Change
Energy efficiency
The Company's energy consumption and carbon emissions primarily originate from production operations, involving energy
sources such as raw coal, purchased electricity, and natural gas. Hengyi has built a systematic energy management platform
to standardize and strengthen energy management at each plant and workshop, enabling real-time monitoring of energy
consumption and centralized energy oversight. To advance energy conservation and emissions reduction, the Company optimizes
its energy mix, invests in technical upgrades, and manages carbon assets, steadily increasing the share of clean energy, improving
energy efficiency, and reducing both direct and indirect energy consumption.
Energy management system
The Company complies with China's Energy Conservation Law and related regulations and develops its energy management
system. To enhance the standardization, rigor, and precision of energy management, Hengyi has established policies including
the Energy Statistics Management Standards and the Energy Management Inspection and Assessment Measures. These policies
define energy management responsibilities for each subsidiary and department, enforce the principle of "whoever uses energy
is accountable," and implement an energy-saving target accountability and performance evaluation system. Hengyi has also
deployed a smart energy management platform powered by big data analytics to identify energy-saving opportunities. The
platform enables real-time data collection, automated ledger generation, and multi-dimensional reporting, providing data-
driven support for energy efficiency retrofits and consumption planning while continuously improving energy utilization and
management precision.
Green and Low-Carbon Practices : Embracing Ecological Harmony
Clean energy substitution
Hengyi develops and deploys clean energy solutions, including renewable energy and waste heat recovery technologies. Through
key initiatives such as achieving 100% rooftop PV coverage in factories, constructing PV pilot generation bases, and deploying
peak-valley energy storage systems, the Company continues to optimize its energy mix and increase the share of green electricity
consumption, driving the green, low-carbon transformation of its production processes.
In 2025, the Company added 132.896 MW of new PV installed capacity, bringing cumulative PV installed capacity to
filling, the Company deployed a cumulative energy storage capacity of 113 MW , with annual charging volume of 29.72 GWh.
Case Brunei SINAR project officially commissioned
As the largest solar project currently operating in Brunei, the Hengyi Brunei Natural and Renewable Energy Sustainable
Integration Project (SINAR) was successfully commissioned on Pulau Muara Besar (PMB). The project has a planned
installation capacity of 476 MWp and is being built in three phases across rooftops, open spaces, artificial lakes
within plant areas, coastal land and open spaces of PMB. In 2025, the first 52 MW of PV capacity was installed and
brought online to maximize solar power generation. Once Phase I is fully operational, it is expected to generate up
to 84,000 MWh of clean electricity annually, meeting 7% of the Hengyi Brunei refinery's total energy demand and
effectively displacing coal-fired power. This milestone marks a critical step in deeply integrating renewable energy into
petrochemical refinery operations and provides strong momentum toward Brunei's national renewable energy targets.
Hengyi Petrochemical Co., Ltd 2025 Environmental, Social, and Governance Report
Case Hengyi Logistics hydrogen-powered truck delivery — A zero-carbon freight pathway
On March 25, 2025, Hengyi Logistics took delivery of five hydrogen-powered trucks at its Haining base and officially
activated the United Hydrogen H2aaS integrated service package, opening a new chapter in zero-carbon freight. The
project adopts a "hydrogen vehicle plus supporting services"model, with concurrent driver training covering both
theory and hands-on operation to ensure safe and efficient deployment. This partnership is a key step in Hengyi's
"dual carbon" commitment and green transition. By replacing conventional fuel with hydrogen fuel, the initiative
reduces logistics carbon emissions and builds a safe, efficient, and low-carbon modern freight model that is replicable
across the industry.
Hengyi Logistics hydrogen truck delivery
Energy conservation
The Company advances its energy conservation and emissions reduction plan through a
and consumption range of measures: phasing out high-energy-consumption motors and equipment, adopting
reduction advanced process control technologies, implementing energy efficiency retrofit projects, and
optimizing production processes. These measures collectively reduce energy consumption at
the source.
Boiler Advanced Control System Supporting Waste Heat Recovery Power Generation
By introducing, commissioning, and putting The Company introduced advanced waste heat recovery
into operation the boiler advanced control technology to effectively collect residual heat generated during
system, the key process indicators of the the production process, including tail-end high-temperature
boiler system have been significantly reduced gas, esterification steam, and various types of waste heat from
compared with manual control, thereby desulfurization processes. This enables the cascade utilization
optimizing combustion efficiency. of low-grade energy. As of the end of the reporting period,
more than approximately 95% of production capacity had
been equipped with supporting waste heat power generation.
Green and Low-Carbon Practices : Embracing Ecological Harmony
Environmental Compliance Management
Hengyi complies with the Environmental Protection Law, the Environmental Impact Assessment Law, and other applicable
regulations. The Company has established a comprehensive environmental management framework and developed the
Environmental Protection Management System and the Environmental Self-monitoring Plan as the foundation for its
environmental management. As of the reporting period, ten subsidiaries had obtained ISO 14001 Environmental Management
System certification.
Subsidiary Haining Hengyi was awarded the "Green
RMB 850 million
Invested in environmental protection
Factory"designation at both national and municipal levels
Environmental emissions Environmental impact
Environmental risk inspection
monitoring assessment
The Company has built a digital The Company engages qualified The Company conducts environmental
s a fet y a n d e n v i ro n m e n ta l third-party agencies to conduct inspections across its subsidiaries, rigorously
information platform. Online environmental assessments. For new examining the operation of environmental
monitoring devices installed at construction, reconstruction, and facilities and identifying non-compliant
major discharge points track expansion projects, the Company practices to ensure that waste gas and
pollutant emissions and the re q u i re s s i m u l ta n e o u s d e s i g n , wastewater meet discharge standards and
operating status of treatment construction, and commissioning solid waste is properly disposed of.
facilities in real time, ensuring of environmental facilities, and
Zhejiang Yisheng appoints ten voluntary
full compliance with regulatory projects may only proceed after
environmental supervisors from surrounding
standards. receiving environmental assessment
communities each year to carry out routine
approval.
environmental monitoring and oversight.
Environmental emergency management Environmental capacity building
The Company continuously updates the Specialized The Company promotes green office practices by
Emergency Response Plans for Environmental Incidents retrofitting energy-efficient lighting, consolidating air
at both headquarters and subsidiary levels. Regular compressor usage, and upgrading equipment to reduce
environmental emergency drills are conducted to test and electricity consumption.
strengthen response capacity and to prevent ecological
Employees are encouraged to use new energy vehicles
risks.
for commuting. The Company has also added new energy
To manage environmental risks during seaborne crude non-road mobile machinery on-site to support low-carbon
oil offloading, Hengyi Brunei continues to advance oil operations.
spill emergency assessment services at the West Wharf,
Employees participate in environmental education
including spill modeling for new crude oil types and regular
programs and public welfare activities. Company-wide
offshore oil spill response drills.
awareness campaigns are held on World Environment Day
to strengthen environmental consciousness.
Hengyi Petrochemical Co., Ltd 2025 Environmental, Social, and Governance Report
Case Internal and external training for environmental compliance
To improve environmental management and clean energy capabilities, Hengyi Brunei has launched a series of
targeted training programs that embed compliance and green development principles across the organization.
On July 17, 2025, the Company invited specialists from Brunei's Pollution Control Department (PCD) to deliver a
session on EPMA2402016 environmental regulations for mid-level managers. The session provided a systematic
overview of local environmental requirements and compliance priorities, strengthening management's awareness
of environmental responsibilities and risk prevention. In the same month, the Company organized an internal
training session on PV energy for relevant personnel, covering clean energy fundamentals, application scenarios, and
operations and maintenance essentials to build technical readiness for upcoming PV deployment. The Company
also developed standardized training materials, including a Wastewater Management Training module, covering
wastewater classification, treatment processes, on-site operations, and management protocols to enhance the
technical skills of frontline operators. Through this systematic training framework combining internal and external
expertise across targeted topics, Hengyi Brunei continues to strengthen its environmental compliance foundation
and support safe, low-carbon local operations.
Water Hengyi prioritizes the efficient use and management
Stewardship
of water resources. In compliance with national water
conservation policies and regulations, the Company
has developed the Water Conservation Management
standardize water resource management. A dedicated
Fresh water saved
water conservation team develops monthly water-
saving plans based on planned production volumes,
strengthens monitoring and control of water use, and
drives continuous progress toward environmental
protection targets. The Company advances lean water
management through technical retrofits of water-
saving facilities, enhanced inspections of utility systems, Water-saving manufacturing
and employee engagement in water conservation. All equipment
production, domestic, and process water is sourced
exclusively from municipal supply, minimizing impact
on surrounding natural water bodies.
Green and Low-Carbon Practices : Embracing Ecological Harmony
Pollution The Company complies with the Atmospheric Pollution Prevention and Control Law, the Water
Reduction
Pollution Prevention and Control Law, the Law on the Prevention and Control of Environmental
Pollution by Solid Wastes, and applicable local emission standards. Hengyi improves its internal
pollution control system, rigorously managing waste gas, wastewater, and solid waste to ensure
all pollutants are properly treated and discharged in compliance with regulatory standards.
Waste gas
The Company implements source-level controls and applies targeted treatment strategies for
different types of waste gas generated during production. Emissions of dust, non-methane total
hydrocarbons, acetaldehyde, flue gas, and other pollutants are strictly controlled, and all waste
gas undergoes rigorous treatment before discharge to meet compliance standards. In 2025,
VOC emission intensity decreased by 5%, while the emission intensities of particulate matter
(PM), sulfur dioxide (SO2), and nitrogen oxides (NOx) each decreased by 10%.
Treatment and emission methods for different exhaust gases
Flue gas from boilers
Discharge through chimneys after the combined process of "bag dedusting + SNCR and
SCR denitration + limestone gypsum desulfurization"
VOCs emission intensity
reduced by Spinning exhaust gas
Discharge through exhaust funnels after treatment by oil smoke purifiers
Waste Gas from Wastewater Treatment Stations
Add sodium hypochlorite scrubbing based on its strong oxidation principle to enhance
Emission intensity of particulate
matter, sulfur dioxide, and VOCs treatment in wastewater exhaust gas
nitrogen oxides reduced by PTA dust
Discharge through exhaust funnels after treatment by pulse dust collectors
Organic exhaust gas
Use RTO (Regenerative Thermal Oxidation) installations to improve the incineration
efficiency to over 95%
Bag filters Sodium hypochlorite spray equipment Desulfurization tower
Hengyi Petrochemical Co., Ltd 2025 Environmental, Social, and Governance Report
Wastewater The Company complies with the Water Pollution Prevention and Control Law and local
discharge standards, managing water pollution prevention and control across every stage
of wastewater generation, collection, treatment, and discharge. At the source, the Company
follows the principle of separating clean water from polluted water, rainwater from sewage, and
different categories of wastewater. A well-established plant collection system, combined with
anti-corrosion, leak-proof, and seepage-proof measures, ensures that all wastewater streams
are separately collected and systematically managed. For treatment, high-concentration
production wastewater is first pretreated through stripping units, then combined with low-
concentration wastewater and domestic sewage for advanced purification at the wastewater
treatment station using a "pretreatment + anaerobic + two-stage aerobic biochemical" process.
For resource recovery, a portion of treated wastewater enters the reclaimed water reuse
system, achieving a reuse rate of reclaimed water of 87–93%.
Ultrafiltration equipment
Reclaimed water treatment equipment
Green and Low-Carbon Practices : Embracing Ecological Harmony
Solid waste Guided by the principles of reduction, recycling, and harmlessness, the Company has
established a comprehensive solid waste classification ledger system. The entire process of
waste, from generation, collection, and storage through transport and final disposal or reuse, is
strictly managed to ensure all waste categories are handled safely and properly.
In strict compliance with the Law
of the People's Republic of China
on the Prevention and Control of
Environmental Pollution by Solid
In accordance with the Law of the
Waste, we entrust the disposal of
People's Republic of China on the
hazardous wastes (including waste oils,
Prevention and Control of Environmental
polymer residues, spent activated
Pollution by Solid Waste, we sell waste Non-
Hazardous carbon, waste mineral oils, etc.)
blocks/slices, used filter cartridges, hazardous
waste exclusively to licensed treatment
textile waste and scrap silk, and Waste
facilities with corresponding hazardous
discarded packaging materials to
waste treatment qualifications and
recycling companies, and entrust the
operational capabilities. All hazardous
environmental sanitation department
waste transfers are conducted in
to dispose domestic waste.
accordance with relevant regulations,
including obtaining proper transfer
approvals and strictly implementing
the hazardous waste manifest system.
Noise The Company places emphasis on noise pollution prevention and management, steadily
improving the acoustic environment around and within its project sites.
During the design and equipment procurement stages, Soundproof rooms are installed for high-noise equipment
we prioritize advanced low-noise equipment such as such as fans, water pumps, and compressors to block
fans, air compressors, and pumps to reduce noise at noise transmission pathways.
the source.
Vibration dampening measures are applied to reduce We manage large vehicles traffic within plant areas.
noise intensity at the source. High-noise equipment is Honking is prohibited on premises and near entrances,
fitted with damping pads during installation, and anti- and speed limits are enforced.
vibration trenches are excavated around equipment to
provide additional buffering.
Noise control measures included
Hengyi Petrochemical Co., Ltd 2025 Environmental, Social, and Governance Report
People-Centric Approach
Building a Talent Powerhouse
Committed to people-oriented management and talent-powered development, Hengyi takes effective measures to
safeguard employees' fundamental rights and interests, and establishes a comprehensive compensation and benefits
system. In addition, the Company has implemented multi-level training mechanisms to empower employee growth. This
not only boosts our core competitiveness, but also empowers employees to thrive together with the Company.
Employee Rights Recruitment and employment
Protection The Company strictly complies with the Labor Law, the Labor Contract Law, and
other relevant laws and regulations, as well as internal employment management
measures such as the Recruitment and Employment Management Measures,
the Labor Contract Management Measures, and the Personnel Movement
Management Measures. We work to develop our own human resources (HR)
management system to achieve end-to-end digital management of HR-related
business for all subsidiaries. Committed to creating an equitable, diverse, and
inclusive workplace, we ensure no inequities in employment based on ethnicity,
race, gender, religious beliefs, or other factors, and respect each employee's right
to free choice of employment and equal employment opportunities. Furthermore,
we firmly oppose any form of forced labor, discrimination, and inequality,
safeguarding employees' legitimate labor rights and interests.
Employees in total Employees with disabilities Ethnic minority employees Overseas employees Labor contract signing rate
Contributions to UN SDGs
People-Centric Approach: Building a Talent Powerhouse
Bachelor's
≥ 50 years old ＜ 29 years old
degree
Number of Number of
Employees by
Vocational Employees
college by Education 448
degree and Levels
degree or
Compensation We have established the Compensation and Benefits System and the Employee Leave
and benefits
Management Measures, striving to build a compensation system with both market
competitiveness and internal equity. We also continuously improve employees' working
conditions and employee welfare system to lay the foundation for harmonious and stable
labor relations.
To promote continuous improvement in employee performance and organizational efficiency,
we enforce total compensation controls. While further advancing workforce efficiency
enhancement initiatives, we also pioneer the "shared contracting" mechanism. This approach
fully energizes employees and effectively boosts workforce productivity through work sections
and production lines contracting. The resulting cost savings are then rewarded to front-line
employees as contracting allowances, ensuring performance and merit-based compensation.
This approach fosters a virtuous cycle where organizational efficiency improvement and
employee income growth go hand in hand.
As of the reporting period, We implement a wage negotiation mechanism, We ensure all social insurance
the Company implemented six execute sci enti fic pl anni ng for salar y are made on time and in full, and
Employee Stock Ownership Plans growth, and consistently enforce total provide employees with multiple
(ESOPs),pursuant to which 480.93 million compensation controls, ensuring a insurance plans, such as employer's
shares were purchased with a transaction steady pay raise for front-line l i a b i l i t y i n s u ra n ce , g ro u p a cc i d e n t
of approximately RMB 5.2 billion and 14,580 employees. insurance, employees' medical mutual aid,
employees were benefited. We have improved and supplemental medical insurance. The
the incentives for employees holding shares in social insurance coverage rate for our employees
key positions to share corporate development Compensation has reached 100%.
achievements with employees. and benefits
Equity Social
incentives Hengyi's insurance
employee
welfare
Life system Labor We standardize operating
We offer housing allowance, canteen and
support security procedures and enhance smart
Holiday
meal subsidies, workwear, free shuttle buses, manufacturing to reduce the labor intensity
benefits
and other life support for our employees, and of production front-line employees while
help non-locals settle down to facilitate school effectively protecting employees' rights to
enrollment for their children. take rests and ask for leave, especially front-line
Beyond offering benefits
employees.
for holidays, birthdays,
and work anniversaries, we
launch special initiatives, including
International Women's Day and Mother's
day celebrations, "Little Migrator y Bird"
summer camp, career enlightenment lectures, and
Children's Day family activities. These benefits not only
strengthen emotional ties between employee families and
the Company, but also enhance female employees' sense of
belonging, fulfillment, and happiness.
Hengyi Petrochemical Co., Ltd 2025 Environmental, Social, and Governance Report
Democratic We further optimize democratic management through institutionalized, standardized,
management
and legally-compliant efforts. By improving our workers' congress system and expanding
our diversified communication channels, we establish efficient and transparent employee
communication platforms, and effectively safeguard employees' rights to information,
participation, and expression.
Democratic Communication Channels
Questionnaire Heng yi Official WeChat "Hengyi Seniors" grass-roots
Symposiums + + Mailbox + +
Surveys official account and videos political committee mechanism
Labor union participation rate
Collective contract signing rate
Shuangtu hold workers' congress for democratic discussions on HR system revisions
Occupational In accordance with the Work Safety Law, the Law on the Prevention and Control of
Health and
Occupational Diseases and other relevant laws and regulations, the Company has formulated
the Regulations on Occupational Health Management and has continuously improved the full-
Safety
process occupational health management system. During project construction, we strictly
implemented "three simultaneities", ensuring the simultaneous design, construction, and
operation of occupational disease prevention facilities with the main projects. During project
operations, the Company has carried out occupational hazard detection, occupational health
checkups for employees, hazard notification, labor protection equipment provision, special
training, and hidden hazards investigation and management in a standardized manner. Regular
testing and dynamic risk assessment are conducted for pollutants such as noise, dust, and toxic
substances, and comprehensive occupational health records are established to ensure that all
management is in line with national occupational health standards. Furthermore, the Company
consistently offers health checkups, healthcare, support and psychological counseling to
protect employees' physical and mental health in all aspects.
Cases of Occupational Disease
OHS Participation
Health & Safety Training Coverage
People-Centric Approach: Building a Talent Powerhouse
Free eye examinations for employees Free eye examinations for employees
Zhejiang Hengyi Polymer conducts occupational health Zhejiang Hengyi Polymer hosts Xixiao Riverside Run for
checkups Fun event themed "Joyful Jogging, Vibrant Health"
Unblocked Building talent development systems
Career At Hengyi, employee capability building is regarded as a pillar of its talent development
Pathways
strategy. We have developed a multi-dimensional growth platform for employees with a
systematic and diversified training system. We radically implement "Blue Series" training
programs to intensify structured training for new hires, key talents, and newly promoted
managers. In addition, we continue to promote vocational skill certification and grassroots
industrial management training for front-line employees to comprehensively enhance their
professional competencies and management capabilities. Through these efforts, we ensure
strong talent support for the Company's high-quality development.
Annual training hours per employee Employee training coverage rate
Hengyi Petrochemical Co., Ltd 2025 Environmental, Social, and Governance Report
"Blue" series training programs
Hengyi Talent Development System
Full Lifecycle Coverage Dual Career Path
Strategic
Sky Blue Programs Talents
Management
Dark Blue Programs Talents
Deep Blue Programs Professional
Talents
New Blue Programs Reserve
Talents
Fresh Graduates Business Elites Company Backbone Corporate Executives
In March 2025, the learning phase of the 2024 Sky Blue Program (for functional management) concludes successfully
People-Centric Approach: Building a Talent Powerhouse
Hengyi Research Institute successfully completes the "New Blue Program"—a onboarding training program for new hires
Vocational skill certification
Based on our national occupational skill level certification pilot platform—the first batch authorized in Xiaoshan District, we
have developed special skill certification management measures for multiple technical fields, and established a standardized
evaluation system and certification procedures for skilled talents to streamline internal occupation skill level certification. As of
the reporting period, 1,766 employees have passed the assessment and obtained the "Senior" occupational skill level certificate,
effectively consolidating the Company's high-skilled talent base.
Cross-border collaborative talent development
The Company continues to develop cross-national university-enterprise cooperation platforms with local educational institutions
in Brunei, including Universiti Brunei Darussalam (UBD), Universiti Teknologi Brunei (UTB), and Institute of Brunei Technical
Education (IBTE). Through multi-party joint schooling and targeted training, we systematically carry out cross-national skilled
talent development.
Front-line manager training
The Company has launched diversified training programs tailored to front-line management and industrial talent demands. For
key front-line employees, we offer management capability enhancement training such as team collaboration, communication
skills, on-site management, and execution. For rank and file employees, we offer professional training such as mechanical,
electrical, and instrumentation (MEI) courses, position-specific safe operating procedures, and 6S methods. We also work to
cultivate high-potential sales professionals and internal trainers, and set up academic advancement programs together with
universities to provide further education and career growth channels for front-line employees.
Hengyi Petrochemical Co., Ltd 2025 Environmental, Social, and Governance Report
Front-line manager training
"Hengyi Craftsmen"
The Company regularly organizes cross-company and multi-trade skill competitions to enhance training and select talents. Winners
are presented with competition rewards, and outstanding skilled talents are selected into the talent pool. We strive to build a high-
caliber industrial talent team and cultivate "Hengyi Craftsmen".
Opening up career development channels
The Company provides employees with diversified and comprehensive career development platforms. Through three parallel
and interconnected career promotion tracks—managerial, professional, and operational, supported by a structured job rank
management system, we offer clear and transparent career progression trajectories tailored to different positions and growth
stages.
Through fair, transparent, and quantitative talent evaluation mechanisms, we streamline talent selection, appointment, and
promotion processes to ensure person-job fit and merit-based appointment. In this manner, we fully unleash the potential of
employees, and empower the upskilling and personal breakthroughs in their career journey, enabling simultaneous personal value
fulfillment and high-quality development of the Company.
Management Path Supervisor Director Manager Department Head Chief Director Executive
Professional Path Associate Junior Intermediate Senior Expert Senior Expert Principal Expert
Technical Path Junior Technician Intermediate Technician Senior Technician Technician Master Technician
People-Centric Approach: Building a Talent Powerhouse
Colorful Hengyi strives to create a warm and caring workplace based on a "family-oriented culture".
Employee
Our regular heartwarming initiatives—spanning holiday benefits, birthday care, and family
Life
open days, as well as diversified team building activities—bring employees closer and boost
team cohesion. Our employee care efforts effectively boost employees' sense of belonging,
well-being, and loyalty, and foster a positive corporate culture built on warmth, harmony,
unity, and unity.
Holiday employee care Hengyi food festival
Dragon Boat Festival activities
Cultural and sports competitions for team building
The 7th Employee Sports Meeting Tug-of-war competition
Heat Relief Care Initiative
Hengyi Petrochemical Co., Ltd 2025 Environmental, Social, and Governance Report
Community Engagement
Bringing Warmth and Better
Livelihoods
Committed to charitable and social impact initiatives, Hengyi launches diverse public welfare programs, including
volunteer services, educational donations, and community engagement, to support disadvantaged groups and community
development. In this manner, we practice corporate social responsibility with concrete actions and contribute to social
harmony.
Support for In alignment with the national rural revitalization strategy, the Company actively
the "Beautiful
contributes to"Beautiful Countryside"Initiative to fulfill its corporate social responsibility.
Leveraging our advantages, we promote synergy across industrial, talent, cultural, and
Countryside"
ecological development, and prioritize industrial and educational assistance. By mobilizing
Initiative
multi-stakeholder resources to implement targeted measures, we support industrial
upgrading, environmental progress, and livelihood improvement in rural areas. Through
tangible actions, we advance all-round rural revitalization and build livable, workable, and
harmonious villages together.
to boost industrial development
contributing to industrial
revitalization in Xinjiang
rural regions with a total In July 2025, Hengyi purchased Xinjiang
procurement amount of RMB grapes through targeted procurement,
consumption-driven assistance, the
Company supported this development
of local specialty industries and boosted
farmers' income growth, thereby
contributing to industrial revitalization in
Xinjiang's rural regions.
Contributions to UN SDGs
Community Engagement: Bringing Warmth and Better Livelihoods
Case Supporting cultural education through ICH paper° cutting on campus
A paper-cutting work created by an intangible cultural heritage(ICH) inheritor from
Hengyi was donated to Turpan No. 1 Primary School in Xinjiang. This initiative inspires
young hearts with the beauty of the living heritage, and enriches school cultural life.
Through such heartwarming educational assistance, we contribute to rural cultural
progress.
Community The Company actively promotes community engagement and service with "Hengyi Employee
Engagement
Hub" serving as a bridge connecting the Company with local communities. We engage in
community governance, cultural development, and environmental improvement to promote
neighborly mutual aid and community integration. Our goal is to build a harmonious and
friendly community, and build a wonderful homeland with the community.
Case "Hengyi Employee Hub" hosts Children's Day event to support children's growth
On May 30, the Infant and Toddler Growth
Center of "Hengyi Employee Hub" held the
Children's Day event themed "Children's Hearts
and Dreams", which attracted 23 families. The
event featured parent-child games, handicraft
making, and a cotton candy station to promote
family bonding and help children build children's
hands-on and social-creating a warm, joyful
space for employee families.
Case "Hengyi Employee Hub" hosts classic reading club to enrich employees' cultural life
On August 23, Hengyi Labor Union held the
Grand View Garden : Tales of Jinling" at Hengyi
Employee Hub, with 16 employees participating.
Drawing on Dream of the Red Chamber, the
event used quizzes, performances, and games
to help employees appreciate a literary classic,
enrich their cultural life, and foster a scholarly
atmosphere.
Hengyi Petrochemical Co., Ltd 2025 Environmental, Social, and Governance Report
Corporate Committed to "giving back to society what it has given us", we actively practice our corporate
Philanthropy
social responsibility through charitable activities such as volunteer services, educational
assistance, and blood donation. Solid steps are taken to advance educational donations,
special fund programs, and other philanthropic projects to integrate into local development. ,
spreading warmth and gathering forces for good.
RMB 25.07 million 26 6,059
Total donations by Hengyi and its controlling shareholder Hengyi Group Blood donations organized Blood donors
Case
Hengyi employees donate blood to spread warmth for social good
On August 6, Hengyi held the 24th group blood
drive, drawing active participation from employees
across all bases. On-site physical examinations,
blood collection, and other processes were
carried out in a standardized manner. In addition,
the Company thoughtfully provided energ y
supplements to ensure donors' safety and comfort.
Among the participants were caring employees who have persisted for years, as well as CPC members,
veterans, and researchers. A total of 145 employees donated 50,500 milliliters of blood, demonstrating
corporate philanthropy and our employees' dedication.
Contribution We actively respond to the Belt and Road Initiative (BRI). By fully leveraging our industrial
to the BRI
advantages, we tap into overseas markets and adhere to localized operations. We also take
solid measures to advance overseas employee care initiatives such as the "Hengyi for the
Future" and "Hengyi Cares", and contribute to local community development and economic
transition of Belt and Road partner countries.
Promoting local Building on our strengths in industries, management, and construction, we actively deepen
development
China-Brunei economic and industrial cooperation, and practice localized operations.
Through proactive communication and integration with local development, we deeply engage
in local construction to support Brunei's economic and industrial development, and strive
for. Through tangible actions, we achieve win-win synergies between the Company and the
locality, contributing to high-quality BRI cooperation.
Community Engagement: Bringing Warmth and Better Livelihoods
Case Phase-II Hengyi-Brunei PMB refinery and petrochemical Phase II project fully launched
The Brunei PMB refinery and petrochemical project in Brunei is not only a key pillar of Hengyi's globalization strategy,
but also a flagship project for high-quality BRI cooperation. It has manifested immense strategic value since its inception.
During the two summit talks on November 18, 2018, when President Xi Jinping visited Brunei, and on February 6, 2025,
when Brunei Sultan Hassanal visited China, the Hengyi-Brunei PMB refinery and petrochemical project, as a flagship
project under the BRI, was officially included in the joint statements of the two states twice.
The Phase I project now operates under a proven and mature model, accumulating rich experience for the overseas
operation of the Phase II project. On January 5, 2026, Hengyi announced the full-scale launch of the Phase II project,
with designed capacity optimized and adjusted to 12 million tons per annum, and focusing on high value-added
products such as diesel, paraxylene (PX), and benzene. Once completed, the Phase II project will form strong industrial
synergy with the Phase I project, thereby driving Brunei's economic growth and promoting bilateral economic and trade
cooperation. It will set an example for high-quality BRI cooperation.
Empowering local talents
Hengyi Industries has always prioritized local talent development and employee
rights protection. In strict compliance with Brunei labor regulations, it develops a
comprehensive employee care system covering talent training, employee rights
protection, benefits provision, and cultural integration. Through structured training,
persons
localized promotion, diversified benefits, and cross-cultural integration, the company
Local jobs provided by the Company
continuously improves local employees' professional competency and sense of
in Brunei
belonging, and fosters an international working environment that is stable, diverse,
respectful, and inclusive.
Hengyi Petrochemical Co., Ltd 2025 Environmental, Social, and Governance Report
We implement comprehensive localization strategy, prioritize hiring local talents, and establish
a full-cycle training system covering new hire onboarding, operational skills, professional
Structured engineering, and management capabilities.
local talent We fully launch competency-based succession planning for local talents in refineries, and build
development clear promotion channels to facilitate the promotion of local employees to key operational and
managerial positions.
We deepen school-enterprise cooperation and conduct local campus outreach activities to
cultivate petrochemical professionals.
We revise our HR management system, strictly implementing zero-tolerance policies against
Full-process
discrimination, harassment, child labor, and forced labor, and respecting diverse nationalities,
employee
genders, religions, and cultures.
rights
We open up accessible complaint channels, with no major labor disputes, discrimination, or
protection
harassment cases received throughout the year.
We implement transparent salary adjustments for foreign employees based on performance and
service length, ensuring equal pay for equal work and equitable development opportunities.
We provide more paid annual leave than legal minimum. Foreign employees are entitled to 6
weeks of home visit leave every six months with round-trip airfare reimbursement.
Diversified
We purchase medical, accident, and overseas special injury, and other commercial insurance for
benefits
all employees with monthly outpatient reimbursement.
and cross-
We organize football and badminton competitions and other cultural and sports activities, and
cultural care
host employee appreciation dinners to enrich employees' lives.
We respect religious beliefs and customs. By addressing religious holiday and prayer demands,
implementing bilingual policies and cross-cultural management training, and hosting
multicultural activities, we promote integration among Chinese and foreign employees.
Hengyi Industries hosts the 3rd Annual Staff Appreciation Ceremony
Engaging Hengyi Industries deeply integrates into Brunei society with its "Hengyi for the Future" and
in overseas
"Hengyi Cares" programs. The former focuses on education and talent development and
philanthropic
the latter focuses on community charity. Through all-round efforts in education support,
assistance for disadvantaged groups, community engagement, and cultural inheritance,
initiatives
we fulfill corporate social responsibility with tangible actions, and serve as a strong bond
connecting Chinese and Bruneian people.
Community Engagement: Bringing Warmth and Better Livelihoods
Case "Hengyi Cares" spreads warmth and positive social energy
Hengyi extends care to every corner of the community, manifesting humanism with actions.
Assisting disadvantaged groups We regularly provide financial support and material supplies to multiple non-
profit organizations, including SMARTER Brunei, Pusat Ehsan, KACA, YASKA, and Space for Autism. By doing so, we
deliver care and warmth to special groups and orphans.
Organizing employee blood drive In July 2025, the Company organized a voluntary blood drive with extensive
employee participation. They pass on compassion with blood donation and alleviate the pressure of the local
blood center.
Promoting multiculturalism We respect local religious beliefs and cultural customs. By organizing donation
activities during Ramadan and celebrating the Maulid (Prophet's Birthday), we promote understanding and
integration among employees from different cultural backgrounds, and foster social harmony.
Supporting national and social campaigns We demonstrate our corporate responsibility in national
development by actively attending and sponsoring national-level campaigns such as the Ocean Week, Maritime
Week, and Teachers' Day Walk.
Public welfare outreach activities in three secondary schools in Brunei
Case "Hengyi for the Future" lights up the hope for education
Hengyi Industries continues the three scholarships with
Chinese and foreign institutions, including Universiti Brunei
Darussalam (UBD), Universiti Teknologi Brunei (UTB), and
Institute of Brunei Technical Education (IBTE), to develop the
petrochemical talent pipeline in Brunei. Meanwhile, O Level,
A Level, and Excellence Award for Higher Education Students
have been established and presented to encourage young
students to pursue excellence. The company continuously
cultivates local young talents to exert far-reaching educational
influence.
Hengyi Petrochemical Co., Ltd 2025 Environmental, Social, and Governance Report
Prospects
The year 2026 represents a critical juncture for Hengyi—both in advancing high-quality development with strategic
resolve and in connecting the first and second halves of our "Centennial Hengyi" journey. Looking ahead, the
Company will continue to strengthen endogenous growth drivers and steadily advance major strategic initiatives,
including coal chemical projects and high-end new green and circular materials. By further diversifying feedstock
sources and deepening product integration.
The Company will further enhance its modern corporate governance framework by strengthening compliance
operations, risk management, and internal controls, thereby improving governance soundness and transparency. At
the same time, we will continue to elevate investor relations management and disclosure quality, advancing value
communication in tandem with brand building. Through steady operations and sustained growth, we are committed
to delivering long-term value to shareholders and all stakeholders.
The Company will leverage green and low-carbon technologies, together with digital and intelligent solutions, to
empower traditional industries in enhancing quality and efficiency. Building on this, we will continue explore more
sustainable circular development pathways, steadily advancing the strategic transformation from a manufacturing
enterprise to a technology-innovation-driven enterprise.
The Company will uphold the safety development bottom line and strictly enforce quality standards, while
upgrading its customer service system to earn market trust through high-quality products and professional services.
At the same time, we remain firmly committed to a people-oriented approach, further enhancing employee care
and career development systems, and building growth platforms to fully unlock talent vitality. Ultimately, we strive
to achieve shared development between the Company and our employees.
The Company will actively fulfill its social responsibilities by deepening public welfare initiatives and community
engagement while strengthening volunteer services. At the same time, we will advance overseas projects with
high standards and further integrate into the Belt and Road Initiative, supporting Brunei's "Wawasan 2035" and
deepening bilateral economic and trade cooperation. With a global perspective and a commitment to pragmatic
action, we are dedicated to building a privately owned multinational chemical enterprise group characterized by
technological leadership, cost competitiveness, and ecosystem synergy.
Prospects
Hengyi Petrochemical Co., Ltd 2025 Environmental, Social, and Governance Report
Appendix
ESG Key Performance
Economic
Indicator Unit 2023 2024 2025
Operating income billion 136.1 125.5 113.5
Total assets billion 108.0 107.5 109.6
Production capacity 10,000 tons/year 4,162 4,335 4,522
-Chemicals (including PX and
benzene)
-Refined oil 10,000 tons/year 565 565 565
-PTA 10,000 tons/year 2,150 2,150 2,150
-PIA 10,000 tons/year 30 30 30
-Polyester fiber（including polyester
filament, polyester staple fiber, and 10,000 tons/year 752 755 938
polyester chips）
-PET（including RPET） 10,000 tons/year 360 530 530
-Caprolactam 10,000 tons/year 40 40 100
-Polyamide 10,000 tons/year 0 0 60
Quality inspection pass rate % 100 100 100
Customer satisfaction after sales % 99 99 99
Social
Indicator Unit 2023 2024 2025
Total number of employees headcount 15,548 16,014 17,511
Percentage of female employees % 26 26 27
Labor contract signing rate % 100 100 100
Social insurance coverage % 100 100 100
Percentage of ethnic minorities
% 6 7 7
employees
Female in senior management headcount 2 3 2
ESG Key Performance
Social
Indicator Unit 2023 2024 2025
Female in middle management headcount 148 180 185
Total amount of employee stock ownership
plan billion 4.4 5.2 5.2
—Total shares purchased Million share 366.84 480.93 480.93
—Benefited employees headcount 12,080 14,580 14,580
Cumulative number of shares traded in
Million share 270.17 399.20 403.14
share repurchase transactions
Training hours per employee per year hour 116 120 120
Training coverage rate % 100 100 100
Occupational health examination coverage % 100 100 100
Invested in safety production million 139.87 169.49 142.83
Fatalities from safety accidents headcount 0 0 0
Safety training hours per employee hour
Security training session 916 961 979
Environmental
Indicator Unit 2023 2024 2025
Invest in Environment million 522 400 850
Carbon dioxide emissions 10,000 tons 809 794 799
Carbon dioxide emissions intensity million tons/RMB billion 0.06 0.06 0.07
SO2 in Exhaust gas tons 1,867 1,373 979
NOx in Exhaust gas tons 3,646 1,936 1,588
COD in Wastewater tons 814 589 466
Hengyi Petrochemical Co., Ltd 2025 Environmental, Social, and Governance Report
Environmental
Indicator Unit 2023 2024 2025
Ammonia Nitrogen in Wastewater tons 12 4 3
Amount of Hazardous Waste tons 558 437 931
Consumption of crude oil 10,000 tons 819 848 881
Consumption of coal 10,000 tons 187 193 247
Annal PV power generation 10,000 kWh 6,514 12,530 16,571
Emission intensity of mercury and its compounds mg/m3 0.000070 0.000067 0.000080
Industrial Freshwater Consumption 10,000 tons 5,161 4,086 3,151
Industrial Freshwater Consumption Intensity million tons/RMB billion 0.38 0.33 0.28
Report Content Indexes
Report Content Indexes
GRI Content Index
GRI Standards Page
GRI2 General Disclosure
management of impacts
GRI3 Material Topics
GRI 201 Economic Performance
Hengyi Petrochemical Co., Ltd 2025 Environmental, Social, and Governance Report
GRI Standards Page
Indirect Economic Impact
GRI205 Anti-Corruption
GRI 302 Energy
GRI 303 Water and Effluents
GRI 305 Emission
Nitrogen oxides (NOx), sulfur oxides (SOx), and other significant
air emissions
GRI 306 Waste
GRI 401: Employment
Report Content Indexes
GRI Standards Page
Benefits provided to full-time employees that are not
provided to temporary or part-time employees.
GRI 403: Occupational Health and Safety
Prevention and mitigation of occupational health and safety
Workers covered by an occupational health and safety
management system
GRI 404: Training and Education
Programs for upgrading employee skills and transition
assistance programs
GRI 405: Diversity and Equal Opportunity
GRI 409: Forced or Compulsory Labor
Operations and suppliers at significant risk for incidents of
forced or compulsory labor
GRI 413: Local Communities
Operations with local community engagement, impact
assessment, and development plans
Operations with significant actual and potential negative
impacts on local communities
GRI 414: Supplier Social Assessment
GRI 416: Customer Health and Safety
Assessment of health and safety impacts of product and
service categories
Hengyi Petrochemical Co., Ltd 2025 Environmental, Social, and Governance Report
Guidelines No. 3 for Self-Regulation of Listed Companies-
Preparation of Sustainability Reports of Shenzhen Stock Exchange
Disclosure Requirement Pages
Addressing Climate Change P43-46
Pollutant Emission P49-51
Waste Disposal P50-51
Ecosystem and Biodiversity Conservation P48
Environmental Compliance Management P47-48
Energy Utilization P44-46
Water Resource Utilization P48
Circular Economy P40-42
Rural Revitalization P60
Social Contribution P61-65
Innovation-driven P32-35
Science and Technology Ethics /
Supply Chain Security P28-31
Equal Treatment of Small and Medium Enterprises /
Safety and Quality of Products and Services P26-28
Data Security and Customer Privacy Protection P28
Employees P52-59
Due Diligence /
Stakeholder Communication P8
Anti-commercial Bribery and Anti-corruption P17-18
Anti-unfair Competition P17
Feedback Sheet
Feedback Sheet
Dear readers,
Thank you for taking the time to read the 2025 ESG Report of Hengyi Petrochemical Co., Ltd. amidst your busy
schedule. To provide more valuable content to stakeholders and keep improving our report preparation and ESG
performance, we sincerely invite you to leave your opinions and suggestions. Please leave your contact or send
feedback to : hysh@hengyi.com, thank you very much for your suggestions and comments.
Tel.:
E-mail：
Address：
For Hengyi, what category of stakeholders do you belong to:
□ Government □ Shareholder/Investor □ Employee □ Customer □ Supplier □ The public □ Academic/
research institutions □ Social organization/non-governmental organization □ Industry association/partner
□ Media □ Other ( )
Your evaluation of this report:
Very Good Average Poor
Report structure □ □ □ □
Wording □ □ □ □
Information disclosure □ □ □ □
Layout design □ □ □ □
Overall evaluation □ □ □ □
What other opinions or suggestions do you have regarding this report or our CSR practices?
首页
微信公众号
证券之星APP
