ESG Report 2024

83 Risk Category -- Physical Risk Develop staggered electricity use plans and work schedules during peak electricity demand periods. Establish contingency plans for energy use and develop energy emergency plans in advance. Arrange hazardous material shipments in the morning or afternoon during summer to avoid high-temperature periods, reducing the risk of fires. Provide heatstroke prevention and cooling supplies during summer and ensure outdoor work safety for employees. Extreme Cold Develop contingency plans for energy use and establish energy emergency plans in advance. Regularly analyse supplier supply risks, develop key raw material stocking strategies, and strengthen supplier relationships. Establish emergency plans to prevent accidents such as fires, explosions, leaks, and poisoning. Strengthen employee winter safety training and ensure safe work operations for employees. Implement insulation and anti-freezing measures in each workshop to prevent equipment damage and production interruptions. Global Warming Extreme Heat Increased ventilation and cooling needs for production facilities and offices, leading to higher energy consumption and operating costs. During high temperatures, the power system may experience peaks in electricity demand, causing power outages and affecting normal production. Sudden high temperatures increase the risk of factory fires. Increased risk of heat-related illnesses such as heatstroke, affecting employee health. Increased heating needs for production facilities and offices, leading to higher energy consumption and operating costs. Icy roads causing transportation disruptions for production materials, leading to material shortages and production delays or halts. Dry weather conditions can lead to accidents such as fires, explosions, leaks, and poisoning, posing safety risks to employees. Low temperatures can cause equipment failures and property damage Increased ventilation and cooling needs for production facilities and offices, leading to higher energy consumption and operating costs. Increased probability of heat-related illnesses such as heatstroke, leading to decreased production efficiency. Medium Term Short Term Short Term High Medium High Risk Category Transition Risk -- China has implemented a carbon emissions trading mechanism. Self-owned power plants of the company are included in the national carbon emissions trading industry, which may increase operational costs due to purchasing carbon emission quotas for compliance. Increasing greenhouse gas emission pricing significantly affects the electricity and chemical industries, leading to rising energy prices or material supply shortages and indirectly increasing operating costs. Regulatory– Increased Greenhouse Gas Emission Pricing Medium Term High Time Horizon Potential Impact Response Measures Set energy-saving and emission reduction targets, actively take measures to reduce greenhouse gas emissions, and gradually reduce carbon intensity and total emissions. Improve energy efficiency by using high- efficiency energy-saving equipment instead of obsoleted high-energy consumption equipment and retrofitting high-energy-consuming equipment for energy savings. Improve energy structure by using clean energy and renewable energy sources such as photovoltaic power generation. Strengthen energy-saving and emission reduction management, training, and promotion throughout the production and operation process to enhance employee energy-saving awareness. Strengthen energy control, establish energy (such as steam) use application systems, and enhance energy use assessments, in production workshops. The Inner Mongolia Company completed the 2023 compliance obligation of 1,831,001 tons of carbon indicators on December 3, 2024. Environmental, Social and Governance Report 2024 The United Laboratories International Holdings Limited Risk Possibility Implement energy-saving renovations for air conditioning and ventilation systems in production facilities and offices to increase energy efficiency. Provide adequate heat prevention supplies for employees during summer and conduct annual employee health checkups.