Leverage's Perspective：

In the sustainable development disclosure framework outlined in the Guidelines, there is a strong emphasis on establishing a comprehensive information reporting mechanism to ensure timely access to data related to sustainable development. Additionally, Leverage believes that it is particularly important to clearly define short-term, medium-term, and long-term goals and align them with the company's strategic planning and resource allocation.  This is crucial, as most listed companies' ESG reports currently overlook this requirement.

Leverage's professional team can provide the following services to help businesses prepare and execute dual materiality assessments:

Industry Benchmarking Analysis: Clarify the disclosure scope required by the standards and define the dual materiality assessment.  Based on compliance requirements, create a sustainable development value chain map.  The scope specification is the foundation of the dual materiality assessment, and streamlining the structured process is also key.  Additionally, understand relevant sustainable development issues and promote market consensus on these issues, assessing their impact.

ESG Management System Construction: Clearly define ESG indicators, establish data collection and reporting mechanisms for the enterprise, set goals and targets, etc., to ensure timely updates of data related to sustainable development.

Stakeholder Engagement: Ensure the participation and feedback of stakeholders are genuine and effective.  Facilitate communication and collaboration between the enterprise and stakeholders, understand the enterprise's concerns and expectations, and provide detailed disclosures in the report.

Sustainable Development Action Plan and Strategic Consulting: Develop sustainable development action plans and strategic consulting aligned with long-term development strategies and resource allocation.  Help enterprises define short-term, medium-term, and long-term goals, ensuring consistency with the enterprise's strategic planning, improving transparency of information, management practices, and enhancing overall sustainable development performance.

ESG Training: Strengthen the enterprise's awareness of sustainable development and assist the enterprise in making a more prominent impact in "human resource management" and "employee training and development," emphasizing employee-related issues in the corporate governance disclosure section.

2. The Section of the Environmental Information Disclosure 

The "Guidelines" disclosure set clear requirements for listed companies in terms of environmental information disclosure, covering key issues such as climate change, pollution prevention, ecosystem protection, and resource utilization and circular economy. Companies are required to disclose information on greenhouse gas emissions, emission reduction targets, pollutant discharges, ecological environmental conditions, and resource utilization, in order to demonstrate their responsibility and actions in environmental protection and sustainable development. This will strengthen transparency and social recognition, promoting the long-term stable development of enterprises.

At this stage, disclosure entities should focus on biodiversity protection and circular economy in terms of ecological environmental protection and resource utilization. In terms of biodiversity, companies should disclose protection measures, impact assessments, and ecosystem monitoring and restoration efforts in detail. Regarding the circular economy, companies should focus on resource recycling rates, the application of circular economy models, and waste management and recycling practices. Comprehensive disclosure of these focal points will help demonstrate the company's integrated practices in ecological protection and sustainable development, enhancing its social responsibility image.

Leverage's Perspective：

This company’s ESG report has disclosed data on direct and indirect energy consumption, comprehensive energy intensity, and total water withdrawal in its environmental information disclosure. However, it has not yet published the specific consumption volumes of various types of energy. In light of this, Leverage, in accordance with the requirements of the Guidelines, recommends that the company actively respond to the national “Dual Carbon” strategic goals, initiate carbon accounting and verification work at the earliest opportunity, proactively manage carbon emission risks, and achieve a low-carbon transformation through measures such as equipment upgrades and improvements in resource utilization efficiency.

Considering the current situation of this company and the insufficient ESG information disclosure, particularly the apparent lack of disclosure regarding greenhouse gas emissions and waste discharge, Leverage believes that the focus of disclosures in this section of the Guidelines should be on comprehensive reporting of climate adaptability, low-carbon transition, greenhouse gas verification, and related emission reduction information. Additionally, the disclosure of carbon-related information should be strengthened, including carbon emission inventories, carbon neutrality plans, and carbon market trading. These provisions aim to guide companies in enhancing environmental management, promoting sustainable operations, transparently disclosing key information to the public and stakeholders, improving corporate image, and boosting social recognition and competitiveness, ultimately achieving a win-win situation for both economic benefits and environmental protection. Therefore, in order to better meet the needs of ESG information disclosure, companies should actively respond to this suggestion, enhance the disclosure of relevant information, and contribute to the promotion of sustainable development and the fulfillment of social responsibility.

3. The Section of the Social Information Disclosure 

In terms of rural revitalization and social contributions, the Guidelines encourage companies to disclose how they integrate their core business with active support for rural revitalization and social welfare initiatives, in order to promote the sustainable development of both the company and the economy. It also calls for a detailed presentation of the impact of these contributions during the reporting period, particularly regarding their influence on the company's brand and business.

At the same time, more and more companies are enhancing their competitiveness in various aspects through sustainable expansion methods such as innovative investment and internal R&D. In implementing an innovation-driven development strategy, companies should not only focus on economic benefits and shareholders' interests but also pay attention to protecting the interests of creditors, dealing with suppliers, customers, and consumers in good faith, and promoting the sustainable development of the company and the broader economy. The disclosure content should cover key issues such as technological innovation and the transformation of scientific and technological achievements, technology ethics, supply chain management, relationships with small and medium-sized enterprise (SME) suppliers, products and services, safety and quality management, as well as data security and customer privacy protection.

Regarding employees, the Guidelines encourage companies to protect the legal rights and interests of their employees in accordance with the law, provide healthy and safe working conditions, enhance employee training, and fulfill their responsibilities for safeguarding employee rights. The reporting entities should disclose information on employee recruitment and compensation, occupational health and safety measures, and employee career development and training during the reporting period. These measures not only help companies achieve sustainable development in multiple areas but also reflect their commitment to social responsibility and their preparedness for future development.

4. The Section of the Corporate Governance Disclosure

The disclosure subject should integrate the concept of sustainable development and related measures into the company's governance system and processes, improving governance mechanisms and promoting sustainable development, in accordance with the company's actual situation and the Guidelines. This means that the company needs to clearly define sustainability goals and responsibilities within its governance structure, ensuring that its business activities align with the requirements of sustainable development, and incorporate sustainability into daily decision-making and management processes.

Preventing Commercial Bribery and Unfair Competition:

The disclosure subject should follow the principles of voluntariness, fairness, equivalent compensation, and good faith in its business activities, and comply with social ethics and business morals. The company should not seek improper benefits through illegal activities such as bribery, nor should it infringe on others' intellectual property rights or engage in unfair competition. The disclosure subject should disclose the specific situation of anti-commercial bribery, anti-corruption, and anti-unfair competition efforts during the reporting period to demonstrate the company's compliance measures and actual operations in these areas.

Leverage's Perspective：

Currently, the company's 2022 ESG report shows that there has been insufficient disclosure regarding commercial bribery and corruption incidents that occurred during the reporting period, this includes matters such as employee disciplinary actions, investigations, termination of partner contracts, bribery and corruption lawsuits, etc. Based on the Guideline, we suggest that the company provide detailed explanations, including a clear statement confirming that no such events occurred. Similarly, regarding unfair competition, such as incidents leading to lawsuits or significant administrative penalties, the company should clearly state that no such events took place and include specific details about any lawsuits, the amounts involved, administrative penalties, and corrective measures already implemented.

Leverage recommends that the company provide detailed disclosure of commercial bribery, corruption incidents, and unfair competition situations during the reporting period, including employee disciplinary actions, investigations, partner contract terminations, etc. If no such events have occurred, it is also essential to clearly state that. It is also suggested that the company offer improvement recommendations and demonstrate corrective actions to enhance risk management. Transparent disclosure and proactive improvement measures will help improve compliance levels and public trust.

Currently, the company's 2022 ESG report shows that there has been insufficient disclosure regarding commercial bribery and corruption incidents that occurred during the reporting period. This includes issues such as employee disciplinary actions, investigations, termination of partner contracts, and bribery and corruption lawsuits. Additionally, based on the Guidelines, we recommend that the company provide a detailed explanation, including a clear statement about the absence of such incidents. Similarly, for cases of unfair competition, such as those leading to litigation or significant administrative penalties, the company should clearly state that no such incidents have occurred, and provide details on the specific lawsuits, amounts involved, administrative penalties, and corrective measures taken.

Leverage recommends that during the reporting period, the company should provide detailed disclosure of commercial bribery, corruption incidents, and unfair competition, including employee disciplinary actions, investigations, termination of partner contracts, etc. If no such incidents have occurred, it should also be clearly stated. It is advised that the company propose improvement suggestions and demonstrate corrective measures to strengthen risk management. Transparent disclosure and proactive improvement measures will help enhance compliance levels and public trust.

5. Disclosure Quality

Leverage's Perspective：

At the management level, enterprises need to integrate sustainable development management with traditional business risk management and financial management, recognizing their close interrelationship rather than treating sustainable development management as an isolated branding effort.

Additionally, companies should establish a top-down sustainability governance structure, strengthen the supervision of the board of directors, and ensure that sustainability issues are incorporated into daily management activities and implemented in the routine practices of relevant departments, rather than being treated solely as an annual reporting task.

In terms of management approaches, companies should consider adopting digital management methods, using digital systems to collect relevant data, and ensuring interoperability between different data sources to provide important management decision-making references and support the disclosure of quantitative data in sustainability reports, as well as year-on-year data comparisons.

In recent years, A-share listed companies have shown an increasing trend in voluntarily disclosing sustainability/ESG information with higher quality, and the implementation of the "Sustainable Disclosure Guidelines" has had a positive impact on market participants.

Leverage provides services such as technical consulting for Ecovadis/CDP/SBTi/CSA/MSCI, the ILO-SCORE Corporate Sustainability Project, ISO management system certifications (including ISO9001, ISO14001, ISO45001, ISO13485, ISO37001, ISO37301, etc.), SA8000 social responsibility audits, corporate integrity assessments, customized corporate social responsibility solutions and CSR report compilation, ESG strategy consulting and report compilation, ESG audits, green supply chain assessments, product carbon footprint calculations, organizational carbon verifications, and carbon neutrality solutions. It is also a member of the IPE organization, an authorized institution for the ILO International Labour Organization SCORE Sustainability Project, and a member of the UNGC (United Nations Global Compact). Leverage can offer ESG governance framework consulting and services such as AA1000 assurance and ESG training to help companies master the ESG information disclosure system and improve their ratings, thereby enhancing their brand and reputational impact.

6. Implementation Proposals

Significant progress in the standardization and regularization of sustainability disclosures will bring more business opportunities to China. To avoid increasingly costly and ineffective information disclosure, further advancement in standardization and structuring is needed. We believe that: