Annual Report 2020

China Merchants China Direct Investments Limited Annual Report 2020 ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT 67 OVERVIEW In accordance with the requirements set forth in Appendix 27 to the Listing Rules, the Company hereby presents this Environmental, Social and Governance (“ ESG ”) report. The Company is an investment company listed under Chapter 21 of the Listing Rules. The Company has appointed China Merchants China Investment Management Limited (the “ Investment Manager ”, “ CMCIM ”) to manage its investment portfolio as well as corporate affairs and to deal with its day-to-day administration under the Investment Management Agreement. The Company, therefore, has no salaried employees, premises, manufacturing or other operations. The Company discharges its corporate social responsibility through balancing the interests between its stakeholders, including its shareholders, and the community to optimise its investment portfolio, to maximise shareholders’ return and at the same time to minimise the related social and environmental impact, in order to achieve the ultimate goal of operating as a sustainable corporation. This report summarises the ESG policies in addressing the material ESG issues, as well as the compliance with laws and regulations relevant to those issues, of the Company and the Investment Manager (“ we ”, “ our ”), for the year ended 31 December 2020 (the “ Reporting Period ”). The preparation of this report adhered to the four principles including but not limited to: Materiality: Materiality assessment is performed to identify material ESG matters related to the Company’s business, and to assess the level of significance of both direct and indirect implications to the Company’s sustainable development and stakeholders. Quantitative: Quantitative information is provided, where appropriate, which helps users assess the Company’s ESG performance objectively. Please refer to the relevant data points and their notes for details. Balance: The Company discloses both positive and negative information and performance regarding its business operations. Consistency: ESG data presented in this report are prepared using consistent methodologies over time, unless otherwise specified either in text or in footnote. ESG GOVERNANCE STRUCTURE With a goal to drive sustainable values for both the Company and our stakeholders, we have established an ESG governance structure to facilitate the Board in managing and communicating ESG issues with continuous enhancement towards the Company’s ESG policies, action plans, performance and reporting. The Board has an overall responsibility for the Company’s ESG strategy and reporting. The Board formulates and reviews the Company’s ESG vision, objectives, strategies and targets to ensure that they are set in accordance with the Company’s strategic goals and vision as well as the latest ESG trends and issues that may affect the Company’s operations. ESG risks are regularly identified and closely monitored to ensure that adequate ESG risk management and internal control are in place. This report has been reviewed and approved by the Board.