Against the backdrop of increasing global awareness of the importance of environmental, social and governance (“ESG”), and where sustainable development has become a social consensus, CITIC Securities Company Limited (hereinafter referred to as “CITIC Securities” or the “Company”) has thoroughly examined the new development concept and responded to the national environmental protection and sustainable development strategy by incorporating ESG factors into the Company’s comprehensive risk management system, along with the establishment of an environmental and social risk management framework.

This framework primarily sets to guide the Company to incorporate ESG factors into due diligence, risk approval and follow-up management in the process of investment and financing business, and to continuously optimize and improve the above process.

The ESG factors should be fully considered by all business departments of the Company in the process of business development and practice, specifically:

· In the practice of credit risk management, the degree of attention to credit risk assessment of enterprises related to high energy-consuming industries should be strengthened, and priority should be given to supporting development pillars encouraged by national policies and green industries. For investment and financing business, the Company shall implement capital investment requirements in strict accordance with regulatory requirements, and actively implement the national requirements for promoting energy conservation and carbon reduction in high-energy-consuming industries.

·In the risk management practice of private equity investment, emphasis should be given to the growth and attractiveness of the industry in which the investment target is located and whether it belongs to the development category encouraged by national policies; investment theme and investment strategy should consider industries with labels such as dual-carbon, environmental protection and new energy; attention to be paid to the corporate governance structure of the investment target, and whether there are major litigation/arbitration events, etc.

· In the practice of investment banking risk management, the Company should combine the green finance and green bond policy requirements of the securities industry and market demand, and strongly support the issuance of green bonds and equity financing of enterprises in the green sector.