ESG Report 2023

8 4 ESG & SUSTAINABILITY GOVERNANCE 4.1 Board Statement The Group actively fulfils its social responsibility and understands that excellent governance of ESG and sustainability matters results in better investment value and the delivery of sustainable returns to the Group and its shareholders. The Board of Directors (the “Board”) believes that comprehensive governance of ESG and sustainability matters will benefit the Group's long-term development. ESG reporting has been formally included in the agenda of the Board. This ESG report has been reported to the Board and reviewed and approved before disclosure to strengthen the Board's understanding of the annual ESG achievements, visions and strategies. To effectively supervise the Group's ESG matters, the Board is responsible for developing and approving the overall ESG vision, strategies and programmes and regularly reviewing the Group's ESG performance. By virtue of the Board meetings, the Board is aware of the compliance of ESG-related risks and related issues, and supervises the risk assessment process and corresponding measures. To establish a comprehensive sustainability management system, the Board has established the Sustainability Committee (the “Committee”) to assist in formulating and updating ESG and sustainable development goals, strategies, and management approaches. The Committee is also responsible for reviewing and monitoring the implementation and outcomes of ESG initiatives as well as reporting to the Board and providing recommendations. In addition, the Sustainability Committee has established the Sustainability Working Group (the “SWG”), composed of leaders from the Group's subsidiaries, business units, and functional departments. The SWG is responsible for coordinating and implementing ESG initiatives, aiming to fully integrate the ESG framework across all levels of the Group, maintaining close communication with stakeholders, achieving compliant and efficient operations, and promoting corporate sustainability. The SWG oversees, inspects, and reports on occupational health, safety, environmental protection, labor protection, and quality assurance processes within the Group and its subsidiaries. It also sets standards for daily ESG operations, including promoting the implementation and execution of ESG projects and organizing relevant ESG training. The SWG regularly analyzes and assesses the ESG performance of the Group and its branch companies, reviews relevant situations, and provides recommendations to the Sustainability Committee. The implementation of ESG initiatives is carried out by an ESG Working Group (the “ESGWG”), composed of leaders from various functional departments. The ESGWG is responsible for practicing, leading, and monitoring policies in accordance with the guidelines set by the SWG, which are then implemented by each unit in their operational processes. To effectively enhance the Group's ESG performance and progress, each department strictly follows the goals they have set, while the SWG monitors the overall fulfillment of these goals and reports to the Board, assisting the Board in evaluating the Group's ESG performance. the meetings, the Board understands the results of the stakeholder engagement management strategy, and reviews and revises the Group's sustainable development and management policy to effectively meet the expectations and needs of stakeholders. In addition, the Group has delegated a professional third party to help manage the Group's ESG matters, prepare the ESG report and conduct data collection and analysis. Such party also helps the Board to collect and analyse stakeholder's opinions on ESG matters and carry out materiality assessment to identify the Group's material ESG issues. The materiality assessment is based on surveys for collecting opinion from the Group's stakeholders, including the members of the Board. By integrating material ESG issues of the industry, the level of concern of different ESG issues are rated and prioritised in order to identify the material ESG issues. The assessment result is supervised and approved by the Board. During the Year, the Group's short-term sustainable development goals have been set and regular Board meetings have been held. The process of setting goals and the progress of related goals were supervised by the Board. In the future, the Board will spare no effort to explore more opportunities to help the Group to further its sustainable development achievements. By virtue of Environmental, Social and Governance Report 2023 The United Laboratories International Holdings Limited