Caitong Securities Co., Ltd.
2023
Stock Code: 601108
ENVIRONMENTAL, SOCIALAND GOVERNANCE REPORT
Developing Green Finance 67Managing ESG Risks 70Implementing Responsible Investment 72Addressing Climate Change 75
Sound Operation
Practicing the Sustainability Concept
Adhering to the Guidance of Party Building 23Improving Corporate Governance 23Strengthening Risk Control and Compliance 30Abiding by Business Ethics 35
Report Pro?le 01Board Statement 03Performance Highlights 05About Caitong 07Column:
Building a Technology, Service, Platform-based, andtransformational Caitong, Striving for "First-class ModernInvestment Bank" 15Column:
Being a Securities Company of Zhejiang Entrepreneurs andEnterprises 17Column:
Caitong Securities Successfully Hosted the Event of HereCome the Shareholders (2023) 19
AppendixAppendix I: Key Performance Indicators List 84Appendix II: GRI Index 89
Enhancing the Level of Industrial Development 41Leveraging a New Growth Pole for Industrial Development 41
Transformation & BreakthroughPursuing Innovative DevelopmentEmpowered by Technology Finance
Promote the Construction of Demonstration Zones forCommon Prosperity 47Serving the Whole Life Cycle of Enterprises 51Protecting the Rights and Interests of Employees 51Adhering to Public Welfare and Charity 60Laying out Pension Finance 63Overall Planning
Transforming to the Intelligent Futurewith Digital Finance
Creating a Fintech Model with Caitong Method 81Safeguarding Information and Privacy Security 83
Common ProsperityCreating a Better Life with InclusiveFinance
Constant E?ortSupporting the "Dual Carbon" Goalwith Green Finance
Report Pro?le
Notes to the report:
This report is the 7th Environmental, Social and Governance (ESG) report issued by Caitong Securities Co., Ltd. ("Caitong Securities", "Caitong","Company", "We", or "Us"). Based on the principles of objectivity, normative, transparency, and comprehensiveness, this report is intendedto summarize the ESG progress and performance of the Company in 2023, present the explorations of the Company in implementing ESGmanagement concepts to promote high-quality and sustainable development in actual operations, enhance communication with stakeholders,respond to the concerns of stakeholders on the ESG materiality issues of the Company, and urge the improvement of the Company in performingits ESG responsibilities.Reporting cycle：
This report is an annual report, which discloses in detail the practices and performance of the Company in the operational, environmental, socialand governance areas for the period from January 1, 2023 to December 31, 2023. Parts of this report are appropriately retrodated to previousyears to enhance the comparability and integrity of this report.Reporting scope:
Unless otherwise stated, the scope of this report is the same as the scope of the Company's annual consolidated ?nancial statements.Data source and reliability assurance:
The information and data disclosed in this report are derived from the internal collection, statistical reports and public materials of theCompany, the operational data involved herein is consistent with the data range in the 2023 annual report of Caitong Securities Co., Ltd., andthe currency amounts involved herein are all measured in CNY. The statistical data have been reviewed and con?rmed by the departments ofthe Company. Currencies mentioned herein refer to CNY unless otherwise speci?ed. The Company undertakes that the information and datadisclosed herein have been con?rmed by the board of directors of the Company and are free of any false records or misleading statements, andis responsible for the authenticity, accuracy and integrity of its content.
Reporting language:
This report is published in simplified Chinese and English versions. In case of ambiguity, the simplified Chinese version shallprevail.Reference and principles:
Guideline No.1 on the Application of Self-regulatory Rules for Listed Companies on Shanghai Stock Exchange – Regulated Operation (December2023 Revision) issued by Shanghai Stock ExchangeStandards for the Contents and Formats of Information Disclosure by Companies O?ering Securities to the Public No. 2—Contents and Formatsof Annual Reports (2021 Revision) issued by the CSRC
The Sustainability Reporting Standards of the Global Reporting Initiative (GRI Standards)
Access to this report:
This report is released in both printed and electronic forms. The electronic version is available on the website of the Shanghai Stock Exchange(www.sse.com.cn).
2023 Environmental, Social and Governance Report
01020102
Board Statement
The year 2023 marks the first year to fully implement the spirit of the 20th National Congress of the Communist Party of China, the 20thanniversary of the implementation of the "Eight-Eight Strategy", and the 30th anniversary of the establishment of Caitong Securities. This year,Caitong Securities deeply studied and implemented the guiding principles of the Central Financial Work Conference and took ?nance to servethe real economy as its fundamental purpose.As a securities company directly a?liated to the Provincial Party Committee or the Provincial Government of Zhejiang, Caitong Securities iscommitted to serving the overall interests by strengthening innovation based on the new positioning of the "?rst-class modern investment bank"set by the Provincial Party Committee and the Provincial Government of Zhejiang and the concept of "wherever Zhejiang entrepreneurs develop,Caitong will provide services". We improved the ESG governance system, implemented the principle of responsible investment, and adheredto the concept of "serving the real economy with ?nancial resources". Under the guidance of the "137N" new strategic system, we served theoverall interests, empowered the real economy, and deeply engaged in Zhejiang. We integrated ESG into the strategy, business development,corporate culture and compliance risk control of the Group, and further advanced technology ?nance, green ?nance, inclusive ?nance, pension?nance, and digital ?nance, striving to create inclusive and shared value for all stakeholders.
Empowered by technology, we continued our efforts in digital reform. We adhered to the purpose of "empowering customers, employees,business, and development" and focused on creating the "1314N" digital reform toolbox centering on the concept of "1231" digital reform, in abid to provide digital intelligence support for our business, build Caitong featuring scienti?c innovation, services, platform, and reform driven bytechnology, and enhance ESG management with high quality.Looking forward, Caitong Securities will continue to focus on the central task and serve the overall interest, bear the mission of "building astrong ?nancial powerhouse", deeply promote the construction of Caitong featuring scienti?c innovation, services, platform, and reform, andstrive to become a leading ESG practitioner in the industry, so as to better serve the three "No. 1 projects" and "ten major projects", and strideforward to the goal of the "?rst-class modern investment bank".
Deepening digital reformGuided by the industry culture of "compliance, integrity, professionalism, and prudence", we continuously refined the governance system,strengthened the function of the strategy and ESG committee, and improved the ESG management mechanism to constantly enhance thesystematic and e?cient ESG management. As an important means to drive the high-quality and sustainable development of the Company, ESGmanagement is deeply embedded in the Company's corporate culture and business development strategy.We strengthened the compliance risk control system and fully insisted on stable and compliant operation. We disclosed information in a fair,timely and accurate manner. We improved the compliance and risk management system in line with our business operation through digitalmeasures to further promote a robust compliance culture and organically integrate ESG risk management with business development. We alsoestablished a comprehensive 3D supervision system to escort the sustainable development of the Company.
Improving corporate governance
Under the goals of "carbon peaking and carbon neutrality" and the "two mountains" theory, we actively responded to the call of the ProvincialParty Committee and the Provincial Government of Zhejiang to explore Zhejiang's path to support "carbon peaking and carbon neutrality" and"lucid waters and lush mountains are invaluable assets" with ?nancial resources. We e?ectively promoted responsible investment by helping
Leading green development
Bearing the country's most fundamental interests in mind and staying true to the original aspiration of "?nance to serve real economy", we
sincerely spared no e?ort to provide more value-added and empowerment services for Zhejiang entrepreneurs and enterprises and grow into
a securities company of Zhejiang entrepreneurs and enterprises. We focused on the three general goals of serving the overall interests, striving
for the ?rst-class modern investment bank, and eliminating risks and guaranteeing security, followed the basic path of deepening innovation,
reform, and opening up, and built the new pattern of "investment bank + investment + wealth management" at a faster pace. Besides, we
advanced high-quality development of 26 counties in mountainous areas by providing direct ?nance to entities, with an aim to help develop
new quality productivity, enhance the wealth e?ect of residents, and empower the development of demonstration areas for common prosperity.
We value talents and endeavor to grow together with employees. We took new measures to train, attract, gather, identify, use and protect talents
in an eclectic way. We also organized various activities to convey positive energy. For instance, we continued to improve the public welfare brand
matrix of"Keeping Goodness in Heart" (一善染心) to collect little love into great love for society.
Ful?lling social responsibilities
investors understand the impact of ESG on investment and guiding investors to invest in green industries. We proactively assumed social
responsibilities, promoted low-carbon and green development, and applied it to the investment by paying attention to the ESG performance
of investment targets, so as to comprehensively improve the ecological value, social value, and humanistic value of investment management
on the basis of asset preservation and appreciation and achieve the all-round integration of ecology, society, and human beings. We also
implemented energy conservation and emission reduction measures to reduce energy consumption and carbon emissions in daily operations,
in order to e?ectively contribute to sustainable development.
2023 Environmental, Social and Governance Report
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Performance Highlights
Environmental performance
Social performance
Governance performance
Indicator2023 performance
Supporting green bond issuance4 bondsTotal amount underwritten for green bondsCNY2.02 billionIPO projects serving green industries2 companiesTotal members of the green research team182Compiling green research reports3,191
Rainwater recycling and reuse2,992 cubic metersRenewable energy usage61,891 kWh
Indicator2023 performance
Total employees4,522Ethnic minority employees91Veteran employees14Employees outside the Chinese Mainland (including Hong Kong, Macao and Taiwan)63
Labour contract signing rate100%Employee representative meetings held5Response rate to proposals at the employee representative meetings100%
Employee medical check-up coverage100%Specialized, excellent, featured, and innovative enterprises for which we helped
their IPO review
Specialized, excellent, featured, and innovative enterprises for which we helped
their IPO o?ering
Total amounts underwritten for technology innovation bondsCNY3.206 billion
Products for common prosperity sold435 products with a sales amount of CNY17.472 billion
Indicator2023 performance
Outlets in counties in mountainous and island areas23, with a coverage rate of 71.88%Amounts invested in public welfare during the yearCNY16.383 million
Investment in rural revitalizationCNY5.723 millionInvestment in social welfareCNY10.66 million
Indicator2023 performance
Female directors1Female supervisors1Proportion of independent directors33.3%Questions answered on the e-interaction platform of Shanghai Stock Exchange51
On-site reception activities hosted17Roadshows organized3Performance brie?ngs held3Customer complaint response rate for three consecutive years100%
Annual overall customer satisfaction91.74%Number of intelligent customer service enquiries as a percentage49%Total compliance inspections completed for the year50+Annual coverage of compliance inspectionmore than 60%Information on integrity and self-discipline released through all channels44
Integrity warning education video views18,226 person-timesAverage anti-corruption training hours received by employees13.57 hoursTotal anti-money laundering trainings organized 13 sessionsExternal anti-money laundering trainings attended7 sessions
2023 Environmental, Social and Governance Report
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About Caitong
Caitong Securities Co., Ltd. is a comprehensive securities group with its characteristics headquartered in Hangzhou. It was founded as ZhejiangFinance Securities Company in 1993, transformed into Caitong Securities Brokerage Co., Ltd. in June 2003, upgraded to a state-owned enterprisedirectly under the provincial government in June 2007, and got listed on the Shanghai Stock Exchange in October 2017 under stock code 601108.At present, the Group has more than 6,000 employees and more than 210 branches. Its business is distributed across Zhejiang province and incentral cities of China such as Beijing, Shanghai, Guangzhou, Shenzhen, Chongqing, Chengdu, Xiamen, and Nanjing, and its overseas services areextended to Hong Kong and Singapore. It consists of six subsidiaries, namely Caitong Securities Asset Management Co., Ltd., Zhejiang CaitongCapital Investment Co., Ltd., Caitong Innovation Investment Co., Ltd., Caitong Securities (Hong Kong) Co., Ltd., Yongan Futures Co., Ltd., andCaitong Fund Management Co., Ltd., which have built their corresponding characteristics and advantages in their respective segments.
Investment bank
Equity business/bond businessNEEQ/mergers and acquisitionsFinancial consulting/overseas business
Wealth managementSecurities brokerage/futures brokerage/overseas brokerage (securities and futures)/margin trading and short selling
Stock pledge ?nancing/margin trading (Hong Kong)/securities research/investment consultingSecurities asset management/futures asset management/securities investment funds/cross-border asset management
Mutual funds management/private equity funds
Investment managementEquity investment/?xed income investmentDirect equity investment/listed securities marketmaking business/alternative investment
Company pro?le
Business Segments of the Company
Group Structure
Focusing on emerging sectors andbuilding a distinctive professional equity
investment institution
Industry leader in terms ofactive management services
Focusing on science and innovation
enterprises to create a ?rst-classbrokerage private placement sub
Characteristic benchmark in the Chinese
asset management industry
Actively building a "bridge" for overseas
listing investment and ?nancing
Comprehensive strength rankedat the forefront among nationwide
futures companies
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Corporate Culture and Philosophy System
Upholding integrity and harmony in pursuit of dreams
Striving to build a ?rst-class modern investment bank
Awe, gratitude, innovation, responsibilityProviding services throughout China with a strong
presence in ZhejiangBe a "comprehensive ?nancial service provider
who understands you better"Sound operation Collaboration and
innovationBe factual and realistic Be practical to
make achievements
Caitong consensus
Corporate
vision
Core values
Mission and goal
Business objectives
Cultural consensus
Corporatespirit
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Credit BusinessGeneral O?ce
Asset Custody
Party-mass Work Department (Trade Union
O?ce)
Digital FinanceDisciplinary Inspection O?ce
Strategic AccountsPlanning and Financial
Research InstituteClearing Depository Center
Investment ManagementOrganization and Human Resources
Fixed IncomesRisk Management
Financial DerivativesCompliance
Strategic Investment Bank Headquarters
Audit
Investment Bank HeadquartersComprehensive Financial TechnologyManagement
Investment Bank II HeadquartersFinancial Technology R&D
Bond Financing HeadquartersSystem Operation and Maintenance
Bond Financing II HeadquartersOperating Center
Corporate Finance Headquarters (InclusiveFinance Headquarters)Comprehensive Wealth Management
Capital Market
Wealth Business Headquarters (Financial
Product Center)
Quality ControlPrivate Wealth
Comprehensive Investment Bank ManagementWealth Institution Headquarters
Branches and business o?ces
Organizational Structure
Shareholders' Assembly
Board of DirectorsBoard of Directors O?ce
(Party Committee O?ce, Strategic Development Department, ZhejiangIndustry-Finance Cooperative Innovation Research Institute)
Operation Management
Board of SupervisorsBoard of Supervisors O?ce
Strategy and ESG CommitteeRemuneration and Nomination Committee
Risk Control Committee
Audit Committee
2023 Environmental, Social and Governance Report
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Honors of Caitong
First Prize of Outstanding Zhejiang Financial Institutions Supporting the
Economic and Social Development of Zhejiang
General O?ce of the People's Government of Zhejiang Province
2022 Case of Best Practices for State-owned Capital and State-owned Enterprises in
Zhejiang Province to Support Common ProsperityState-owned Assets Supervision and Administration Commission of Zhejiang Province2022 Excellent Applications of Digital Reform of State-owned Assets and
State-owned Enterprises in Zhejiang ProvinceState-owned Assets Supervision and Administration Commission of Zhejiang Province
"Competing for Excellence" Projects Under Major Reform of State-owned Capital
and State-owned Enterprises in Zhejiang ProvinceState-owned Assets Supervision and Administration Commission of Zhejiang Province2022 Case of Best Practices for "Competing for Excellence" Projects Under MajorReform of State-owned Capital and State-owned Enterprises in Zhejiang ProvinceOffice of Leading Group of Deepening State-owned Enterprise Reform of Zhejiang Province
2022 Pioneer Stock Market Maker on the STAR Market
Shanghai Stock Exchange"Xinhua Credit Golden Orchid Cup" for Outstanding Case of Responsible InvestmentDirected by National Development and Reform Commission, hosted by Xinhua News
Agency and the People's Government of Guangzhou Municipality
"Most Trusted Financial Institution by Zhejiang Entrepreneurs" Award
Zhejiang Daily Press Group2023 Good Word of Mouth Award for Finance Servicing People in Zhejiang Province
Zhejiang Daily Press Group · TideNews, Qianjiang Evening News
Excellent Sweet Potato Economy Case at the 5th High-quality Development Think Tank
ForumZhejiang Federation of Humanities and Social Sciences, Zhejiang Daily Press Group,
Zhejiang Development & Planning InstituteAnnual Local Contribution Brand Award
International Financial News of People's Daily
The Third (2023) Best Integration Case of "Jinxintong" Financial Technology
Innovation ApplicationChina Academy of Information and Communications Technology2023 Zhejiang Primary and Secondary School Research and Practice Education BaseDepartment of Education of Zhejiang Province, Zhejiang Provincial Department of Culture
and Tourism
The First China Securities Industry Junding Award — Investment Consulting
Services APPSecurities Times
2023 China Securities Industry Junding Award — M&A Financial Advisor
Securities Times
2023 China Securities Industry Junding Award — Overseas Investment Bank
Securities Times2023 China Securities Industry Junding Award — Investor Education
Securities Times
2023 China Securities Industry Junding Award — Universal Asset Management
Institution
Securities TimesGolden Fund ? Growth Fund Management Company Award
Shanghai Securities News
2023 Jinding Award — 2023 TOP30 Listed Companies in China Securities Industry
for Brand ValueNational Business Daily
2023 Jinding Award — Most Powerful Asset Management Securities Company
National Business Daily
2023 Jinding Award —Best Account Customer Investment Products
National Business Daily
2023 Jinding Award — Most Characteristic Fund of Funds of Securities Companies
National Business Daily
Active Equity Product Innovation Demonstration Case
CHINAFUND2023 "CSR Competitiveness" Typical Responsibility Cases Selection —"ESG
Enterprise Demonstration Case" Award
China Business Journal
2022-2023 China Best Fund of Funds of Securities Companies
ChineseVenture
Most Promising Investment Bank
www.xcf.cn
2023 Typical Cases for Digital Transformation of Public Companies
China Association for Public Companies2023 Best Practice Cases for Board of Directors of Public Companies
China Association for Public Companies
2023 Excellent ESG Practice Cases of Public Companies
China Association for Public Companies
Here Come the Shareholders (2023) National Champion, Best Organization Award,Best Organizer Award, Best Co-organizer Award, Best Communication Ambassador,Shareholders Coming & Guardian Investors Top 10 Text and Video Insurance Cases
China Securities Regulatory Commission
"Xinhua Credit Golden Orchid Cup" for Outstanding Case of ESG Social Welfare
ContributionXinhua News Agency
2023 Environmental, Social and Governance Report
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As a state-owned securities company directly a?liated to the Provincial Party Committee or the Provincial Government of Zhejiang, CaitongSecurities bears the country's most fundamental interests in mind and has always put the ?nancial function in the ?rst place. Based on thenew positioning of the "?rst-class modern investment bank" set by the Provincial Party Committee and the Provincial Government of Zhejiangand following the journey of building Caitong featuring scienti?c innovation, services, platform, and reform, we are committed to channelingfinancial resources into the real economy by utilizing comprehensive financial service tools of "investment bank + investment + wealthmanagement". Taking the "Eight-Eight Strategy" as the general guiding principle, the Company e?ectively uni?ed its thoughts and actions intothe spirit of General Secretary Xi Jinping's important speeches and the decisions of the CPC Central Committee, and incorporated the spirit ofthe Central Financial Work Conference into its entire development process of building Caitong featuring scienti?c innovation, services, platform,and reform, so as to build a ?rst-class modern investment bank and provide more bene?cial explorations and solutions for building a ?nancialpowerhouse.
Boosting innovation to better serve the digital economy and improve the "No. 1 development project"
●?
Establishing a comprehensive financial service system for "specialized, excellent, featured, and innovative"enterprises, and ranking ?rst in Zhejiang in terms of the number of companies we tutored for listing on the BeijingStock Exchange
●?
The Fund of Funds of Hangzhou Chengxi Sci-tech Innovation Corridor with a total scale of CNY4 billion waso?cially put into operationScienti?cinnovation
Deepening reform to better serve the business environment and optimize the "No. 1 reform project"
●?
Providing direct financing of CNY165.8 billion to enterprises, with an increase of CNY60.5 billion over theprevious year
●?
Establishing pilot bases for inclusive services throughout the entire life cycle of enterprises in Jinyun, Lishui,Zhejiang, and Pingyang, Wenzhou
●?
Carrying out in-depth cooperation with major chain enterprises such as Alibaba, Ant Group, Geely and Chint, andgradually standing out for the industry-?nance cooperation cases
●?
Building "Easy Investment in Zhejiang", a digital ecological platform for direct ?nancingServices
Strengthening opening up to better serve the "sweet potato economy" and upgrade the "No. 1 opening-up project"
●?
Establishing a "one account" mechanism for cooperation with local governments (we have established strategiccooperation with 9 prefecture-level cities and 51 county-level governments in the province, with a coverage rate of100%)
●?
Launching activities to provide ?nancial support to more than 3,000 Zhejiang entrepreneurs and enterprises
●?
Participating in the construction of the Zheshang Research Center, leading the establishment of the Industry-Finance Cooperation Committee, carrying out four industry-?nance cooperation activities, establishing the ZhejiangIndustry-Finance Cooperative Innovation Research Institute to magnify the aggregation e?ect of ?nancial resources,and gradually forming an e?ective channel for multi-party cooperation among governments, ?nancial institutionsand enterprisesPlatform
Striving for a national first-class modern investment bank to better enhance the capability to serve the "three No. 1projects"
●?
Innovating on functional positioning. We strived to build a new Caitong driven by three businesses of "investmentbank + investment + wealth management" by the end of the "14th Five-Year Plan" period
●?
Reforming the governance system. We strengthened the awareness of "One Caitong", built a collaborative,
integrated and efficient group army combat mode, improved the strategic decoding mechanism, classified
assessment mechanism, and incentive and constraint mechanism, and created a united, problem-solving and
closed-loop entrepreneurial atmosphere
●?
Strengthening opening-up. We intensi?ed resource integration and collaboration through extensive cooperation
with governments and regulatory authorities, industry institutions and chain enterprises across the province, so as
to prevent risks and ensure safety while promoting the developmentReform
Column
Building Caitong featuring scienti?c innovation, services, platform, and reform
Building Caitong Featuring Scienti?c Innovation, Services, Platform, andReform, Striving for "First-class Modern Investment Bank"
2023 Environmental, Social and Governance Report
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CaseFinancial Support Activities for Enterprises
CaseA New Type of Think Tank Boosted High-quality Development of Zhejiang Entrepreneurs
Adhering to the concept of "wherever Zhejiang entrepreneurs develop, Caitong will provide services", Caitong Securities insists on developingZhejiang economy and Zhejiang people's economy, and strives to become a securities company that most understands Zhejiang people andmainly provides services for Zhejiang entrepreneurs and enterprises. In 2023, Caitong Securities played its resource aggregation function as aprovincial ?nancial platform and established strategic cooperation with 9 prefecture-level cities and 51 county-level governments in ZhejiangProvince, with the coverage rate of "one account" mechanism reaching 100%. At the same time, the Company signed contracts with the GeneralAssociation of Zhejiang Entrepreneurs and 4 local Zhejiang chambers of commerce, and joined the Listed Company Committee of the GeneralAssociation of Zhejiang Entrepreneurs as an honorary director unit, visited and received 16 o?ces of Zhejiang chamber of commerce in otherprovinces throughout the year, and carried out 25 activities with local chambers of commerce.
Column
Being a Securities Company of Zhejiang Entrepreneurs and Enterprises
Launch Ceremony of Financial Support Activities
Zheshang Research Center Establishment Conference
In April 2023, at the capital market sub-forum of the 7th Global Private Equity West Lake Summit, Caitong Securities officiallylaunched a series of ?nancial support activities to help establish a industry-?nance cooperation ecosystem of Zhejiang enterprisesand advance the integrated development of Zhejiang economy and Zhejiang people's economy. As of the end of 2023, we focused onZhejiang entrepreneurs and enterprises, and carried out three ?nancial support activities in Hangzhou, Taizhou and Quzhou, coveringmore than 3,000 Zhejiang entrepreneurs and enterprises.
In June 2023, the Zheshang Research Center EstablishmentConference was held in Hangzhou, and Caitong Securitiesparticipated in its establishment as a special support unit. Asthe only securities company directly affiliated to the ProvincialParty Committee or the Provincial Government of Zhejiang,Caitong Securities led the establishment of the Industry-FinanceCooperation Committee of Zheshang Research Center. Thiscommittee adheres to the public welfare and service-orientedpositioning and focuses on the investment and financing needsof Zhejiang entrepreneurs and enterprises by giving full play to itsprofessional advantage in comprehensive ?nancial services, aimingto help build an industry-?nance cooperation ecosystem of Zhejiangentrepreneurs and empower the high-quality development ofZhejiang entrepreneurs and enterprises.
2023 Environmental, Social and Governance Report
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As the only securities company directly a?liated to the Provincial Party Committee or the Provincial Government of Zhejiang, Caitong Securitieskeeps in mind the fundamental purpose of finance to serve the real economy, earnestly practices the investor-based concept, attachesgreat importance to investor education and protection, strives for the goal of common prosperity by leveraging its professional and regionaladvantage, and demonstrates its responsibility and commitment as a state-owned enterprise. On the occasion of the 30th anniversary of theestablishment of Caitong in 2023, the Company undertook the activity of Shareholders Coming (2023) Zhejiang Area and won the nationalchampion and the Best Organization Award after going through the mobilization and deployment stage where we strived for a good performanceand the ?nal stage where we competed with the leading securities ?rms, which not only attracted the attention and applause from all walks oflife, but also showed the style of Zhejiang capital market and Caitong's strength and courage. Also, there was extensive experience for publicreference.
ColumnPracticing the Investor-based Concept and Cultivating Financial Culture withChinese Characteristics— Caitong Securities Successfully Hosted the event ofHere Come the Shareholders
Insisting on efficient promotion and high-quality innovation, promoting online communication and offlinepromotion simultaneously, and striving to expand the coverage and in?uence of Shareholders Coming
Caitong Securities attaches great importance to media publicity, and releasedmore than 1,100 original news reports related to Shareholders ComingZhejiang Area in the form of media reports, Weibo, WeChat, and short videosthrough Zhejiang Satellite TV, Zhejiang Economic TV, Qianjiang City, Xinhuanet,TideNews, quanjing.com, Sina Weibo, Toutiao, Douyin and other mediachannels, with a viewership of nearly ten million times.During the preliminary competition, 724 activities were held in colleges anduniversities, 312 activities were held in listed companies, 253 activities wereheld in investor education bases, and 1,899 activities were held in communities.More than 6 million people participated in characteristic activities such ashealthy run and investor education marketplace. The number of registeredusers for Shareholders Coming Zhejiang Area reached 2.39 million and thenumber of regional registered users reached 1.75 million, both ranking ?rst inall regions in China.
Shareholders Coming Zhejiang Area Poster
Upholding high-level design and high-quality polishing, deeply integrating investor education activities with regionalcharacteristics, and striving to improve the sense of participation and gain for the Shareholders Coming activityDuring the Shareholders Coming activity, Caitong Securities carefully designed each activity, expanded the breadth and depth ofZhejiang's regional characteristics by leveraging its regional advantage in branch network in combination with the investor educationbrand of "Caitong Path to Financial Management", and upheld the main theme of "welcoming the Asian Games, pursuing dreamsand common prosperity" throughout the competition. We set up a structure comprising three projects, namely "Welcoming the AsianGames", "Tracing the Source", and "100 Lecturers", and held a series of distinctive and characteristic investor education activities,such as the Registration-based IPO System "Flash Mob" Training Camp, "Investor Education for Grassroots Employees", "Into ListedCompanies", "Immersive Asian Games Experience", Future Shareholder Growth Camp, Caitong Industry Insight, and ShareholdersComing Live Streaming Program.
Shareholders Coming Special Investor Education ActivityShareholders Coming Caitong Team
Adhering to deployment and planning from a high height, implementing the investor-based concept throughout theactivity, and focusing on telling the story of reform and development in Zhejiang capital marketZhejiang Securities Regulatory Bureau, as the organizer ofthe activity for the first time, invited Zhejiang Banking andInsurance Regulatory Bureau as a special support unit andestablished a contact mechanism in close contact with thesecurities regulatory bureaus of the competition areas tostrengthen organizational protection. Caitong Securitiesimmediately organized the preparatory meeting forShareholders Coming Zhejiang Area, extensively mobilizedsecurities and futures institutions, investor education basesand other market players within its jurisdiction to activelyparticipate in the activity, fully guaranteed the smoothdevelopment of the activity, and expanded the in?uence andcoverage of the activity. Combined with the "May 15 NationalInvestor Protection Publicity Day", the Company organized thelaunch meeting of Shareholders Coming, marking the o?cialkick-o? of the Shareholders Coming Zhejiang Area.Preparatory Meeting for Shareholders Coming Zhejiang Area
2023 Environmental, Social and Governance Report
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Sound OperationPracticing the Sustainability Concept
Adhering to the guidance of Party buildingImproving corporate governanceStrengthening risk control and complianceAbiding by business ethics
Adhering to the guidance of Party building
Improving corporate governance
Guided by Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, the Company conscientiously studied and implementedthe spirit of General Secretary Xi Jinping's important statement on the reform and development of state-owned enterprises and Party buildingand his important speech made during his visit to Zhejiang Province, and thoroughly studied and implemented the spirit of the 20th CPCNational Congress, the Central Financial Work Conference and the 15th Provincial Party Congress. We further improved the overall leadershipsystem of the Party, strengthened Caitong's anti-corruption, cultivated a new integrity and harmonious vibe, integrated our resource advantageto support the "two firsts", concentrated efforts on reform and development, and improved the development quality of Caitong withintelligent governance system, striving to achieve a second leapfrog and made contributions to the Zhejiang practice under the Chinese path tomodernization.
The Company strictly followed the requirements ofthe Company Law of the People's Republic of China, theSecurities Law of the People's Republicof China, theRegulations on the Supervision and Administration of Securities Companies, the Guidelines on the Governance of Securities Companies,theGuidelines on the Governance of Listed Companies,and other documents to build a governance structure featuring mutual independence,mutual cooperation, clear division of rights and duties, and checks and balance, hence ensuring the comprehensive and e?ective system for corporategovernance. As the leadership core and political core in the governance structure, the Party Committee is responsible for the development of theenterprise and takes active measures to establish a mechanism for communication with the Shareholders' Assembly, the Board of Directors, the Boardof Supervisors, and the management to support their exercise of duties in compliance with the law.
Operation of three governing bodies
In 2023, the Company
Board independence and diversity
Board of Directors' Performance Honor
In 2023, the Company
In 2023, the CompanyThe Company believes that the independence and diversity of the Board of Directors isa key factor to protect the interests of shareholders and maintain the stability and long-term performance of the Company. The Remuneration and Nomination Committee takesinto account the professional experience, skills, knowledge, tenure of service, region,culture, educational background, gender, and age of Board members when reviewingand evaluating suitable candidates to serve as directors of the Company. The currentmembers of the Board of Directors come from different industries and have extensivework experience. Their professional ?elds cover law, risk management, accounting, and?nance, which is conducive to the scienti?c decision-making of the Board of Directors.The Remuneration and Nomination Committee is responsible for evaluating theindependence of the Board of Directors, ensuring that the number and composition ofthe Board of Directors of the Company comply with laws and regulations, and that thenumber of independent directors exceeds one third of the total number of directors. Atthe same time, the Company invites independent directors to serve as the chairman ormembers of the special committees of the Board of Directors, and allows directors toconsult other independent professionals for independent advice when appropriate toimprove their advice and decision-making capability.
the "Best Practice Case of ListedCompany Board O?ce in 2023"
Received a "5A" rating in the"Evaluation of Listed Company BoardSecretary's Performance"Awarded the "Best Practice Case"in the "2023 Best Practice CreationActivity for Listed Company Boards"
In 2023, the company received various honors awarded by the China Association for Public Companiesheld
3 Shareholders' Assembly where
proposals were considered and adoptedheld
9 meetings of the Board of Directors where 52
proposals were considered and adoptedThe Board of Directors consists of 9 directors, including 3 independent directors, 1
employee director,and
female director
held 4 meetings of the Board of Supervisors where 31 proposals were considered and adoptedThe Board of Supervisors consists of 5 supervisors, including 1 female supervisor
had 1 female directorIndependent directorsaccounted for 33.3%
Note: From February 2024, the number of board members of the company will be 11, including 4 independent directors.
2023 Environmental, Social and Governance Report
2324
Sound OperationPracticing the Sustainability
Concept
Transformation &BreakthroughPursuing InnovativeDevelopment Empowered byTechnology Finance
| 01 | 02 |
Common ProsperityCreating a Better Life with
Inclusive Finance
Constant E?ortSupporting the "Dual Carbon"Goal with Green Finance
| 03 | 04 |
Overall PlanningTransforming to the IntelligentFuture with Digital Finance
StakeholdersIssue of ConcernCommunication Channel and MethodShareholders andinvestors
●?
Investor relations management
●?
Investor education
●?
Corporate governance
●?
Shareholders' Assembly
●?
Regular information disclosure
●?
Investor survey and interaction
●?
Performance brie?ngs
●?
Construction of the investor education baseCustomers
●?
Protection of customer rights and interests
●?
Customer service hotline
●?
Caitong Securities APP
●?
Customer satisfaction survey
●?
Construction of investor education basesEmployees
●?
Employee training and development
●?
Employee interests and bene?ts
●?
Employee equality and diversity
●?
Talent retention and incentive
●?
Employee representative meeting
●?
Training sessions
●?
Employee activities
●?
Greeting by the Trade Union
Governmentand regulatoryauthorities
●?
Compliant operation
●?
Risk management
●?
ESG management
●?
Common prosperity
●?
Serving economic development of ZhejiangProvince and other regions
●?
Serving the real economy
●?
Promoting cultural development
●?
Participating in government survey activities
●?
Strengthening compliance risk control
●?
Implementing the ?nancial advisory system
●?
Construction of investor education bases
●?
Promoting e?orts for industry culture buildingSuppliers
and partners
●?
Supply chain management
●?
Advocating green operation
●?
Cooperation and exchange
●?
Contract performanceCommunity
●?
Community welfare and philanthropy
●?
Advocating green operation
●?
Voluntary services
●?
Public welfare activities
●?
Green o?ce
●?
Green ?nance
The Company has incorporated ESG into its strategy, business development, corporate culture, and compliance risk control, and payscontinuous attention to the impact of its own development on the environment and society. The Company's Board of Directors comprehensivelysupervises matters related to ESG. Under the Board of Directors, there are the ESG Committee and ESG Management Team; moreover, ESGspecialists are designated at the relevant departments of the headquarters and at subsidiaries to continuously improve professional ESGcapabilities and management.
The Company attaches great importance to e?ective communication with various stakeholders. We have established a normalized mechanismfor communication with stakeholders, including shareholders and investors, customers, employees, government and regulatory authorities,suppliers and partners, and communities, so as to get an in-depth understanding of and actively respond to the expectations and appeals ofvarious stakeholders, and incorporate key concerns of such parties into our daily operation and decision-making to create shared value.
Communication with stakeholders and materiality analysisESG management
ESG rating and market recognition
ESG management system
· MSCI ESG rating remained at BB· Re?nitiv ESG rating reached B+· Wind ESG rating reached BB· Wind ESG rating reached BB
Supervision level
●?
Comprehensive oversight of ESG matters
Execution level
●?
Speci?cally implementing relevant tasks
Management level
●?
Formulating the ESG strategy of the Company
●?
Supervising the implementation of the ESG strategy
●?
Identifying ESG opportunities and risks, etc.
Board ofDirectorsStrategy and ESG
CommitteeESG Management
Team
2023 Environmental, Social and Governance Report
2526
Sound OperationPracticing the Sustainability
Concept
Transformation &BreakthroughPursuing InnovativeDevelopment Empowered by
Technology Finance
| 01 | 02 |
Common ProsperityCreating a Better Life with
Inclusive Finance
Constant E?ortSupporting the "Dual Carbon"
Goal with Green Finance
| 03 | 04 |
Overall PlanningTransforming to the IntelligentFuture with Digital Finance
High
HighLow
Importance to stakeholders
Importance to Caitong Securities
Supply chain managementCommunity welfare and philanthropy
Sustainable ?nancial products and services
Impact of operations and services on the environmentPrivacy and data security
Fintech innovation
Protection of customerrights and interests
Inclusive ?nance
Investor educationInvestor relations management
Employee training and development
Employee interests and bene?ts
Developing green ?nanceResponding to climate change andsupporting the “dual carbon” goal
Serving economic development ofZhejiang Province and other regionsResponsible investment
Abiding by business ethics
Inclusive ?nance
Compliant operation
Risk managementCorporate governance
ESG management
Talent retention and incentive
Serving the real economyEmployee equality and diversity
Promoting cultural developmentAdvocating green operation
Common prosperity
In December 2023, the Company held the 2023 ESG projectlaunch meeting and carried out ESG special training. At themeeting, the ESG trend, ESG management improvementpractice and ESG-related disclosure in 2023 were discussed.The Company has clari?ed the importance of ESGmanagement and its impact on future development, andpointed out that the Company will integrate ESG principles,respond to the challenges in global sustainable development,and enhance corporate competitiveness and brand value, soas to establish a more solid business foundation and attractmore investors and partners.
In accordance with theCompany Law of the People's Republic of China, theSecurities Law of the People's Republic of China, theGuidelines forInvestor Relations Management of Listed Companiesand other relevant provisions, the Company has established and improvedthe InvestorRelations ManagementSystem based on its actual situation, and advanced investor relations management through multiple channels, platformsand ways under the basic principles of compliance, equality, initiative, and good faith, hence e?ectively protecting the legitimate rights andinterests of investors, especially small and medium investors.
Investor protection
2023 ESG Project Training Launch Meeting of Caitong Securities
ESG management practices
In 2023, the Company
answered 51 questions on thee-interaction platform of theShanghai Stock Exchange
held 17 on-sitereception activities
held 3 performancebrie?ngsorganized 3roadshows
was rated Grade A for information disclosure by the Shanghai Stock Exchange
2023 Environmental, Social and Governance Report
2728
Sound OperationPracticing the Sustainability
Concept
Transformation &BreakthroughPursuing InnovativeDevelopment Empowered byTechnology Finance
| 01 | 02 |
Common ProsperityCreating a Better Life withInclusive Finance
Constant E?ortSupporting the "Dual Carbon"
Goal with Green Finance
| 03 | 04 |
Overall PlanningTransforming to the IntelligentFuture with Digital Finance
The Company has been actively engaged in the public welfare investor education undertakings, and adheres to the investor-based concept.We continuously improve investor education bases and carry out diversified investor education activities through multiple channels, multi-dimensions and multi-levels, in a bid to e?ectively help small and medium investors understand securities and futures knowledge, and guideinvestors to establish rational investment concepts, enhance risk prevention awareness and strengthen anti-fraud awareness. In 2023, ourinvestor education bases participated in the national base index assessment for the ?rst time and obtained a "good" evaluation.
Taking customers as the center, the Company has built a strategic customer resource center and an integrated sharing platform through aninnovative and synergistic reform, which can provide comprehensive whole life cycle ?nancial services. We have also formulated documents,such asthe Management Measures for Customer First Question Responsibilityand theInvestor Complaint Handling System, to optimizecustomer experience and enhance service quality.
Customer services
Investor protection
In 2023,
our customer complaint responserate has reached 100% forthree consecutive years
our overall customersatisfaction for the yearreached 91.74%
the number of intelligent customer service
enquiries accounted for up to49%, with theservice quality and efficiency both improved
Caitong Securities attaches great importance to the interests of investors. In 2023,
we are the first securities company in the industry to distribute interim dividends for 2023,and the annual cash dividend ratio since our listing exceeds30% of the net profit attributable to ordinaryshareholders of the listed company in the consolidated ?nancial statementWe distributed dividends twice, with CNY
0.1 per share in 2022 and CNY0.05 per share in 2023
The Company advocates responsible marketing, values the authenticity of product marketing information, and strictly complies with the rulesand guidelines of industry associations when marketing products. We eliminate unfair competition, do not exaggerate or deceive content,do not falsely report services or prices, and do not make misleading statements to competitors. In respect of investment bank business, westrictly manage marketing personnel's publicity and promotion to ensure that contractors can conduct timely and accurate publicity under thecondition that they fully understand our products and services; we strictly supervise contractors' services and establish a tracking and feedbackmechanism to ensure their service quality. In terms of fund business, Caitong Capital, a subsidiary of the Company, revisedthe FundraisingManagement Systemin 2023. This revision especially emphasized the importance of investor suitability and risk warning, prohibited falserecords, misleading statements or major omissions in recommendation materials, and prohibited promising returns and other behaviors withexaggerated or one-sided fund promotions.
Responsible marketing
Strengthening risk control and complianceThe Company continued to deepen the grand supervision system, built a grand supervision platform consisting of the "sharing center, pro?lecenter, and collaboration center" under the requirements of being "uni?ed and e?cient, joint e?orts, early measures, and precise and e?cient",and integrated the supervision functions of discipline inspection, audit, patrol inspection, compliance risk control, and the Board of Supervisorsto form a grand supervision force. Meanwhile, the Company explored a new mode of "clean and compliance" supervision in line with thecharacteristics of the securities industry. We integrated discipline inspection and compliance supervision, set up a leading supervision group forkey areas, and explored the establishment of supervision groups in key areas to conduct supervision in advance and better understand business,so as to build a clean and compliance Caitong and facilitate our steady and long-term high-quality development.
The Company established the idea of comprehensive risk management in line with the requirements for risk control in the ?nancial industryand its goals of risk management and control. The idea of comprehensive risk management called for the participation of the Board of Directors,managers, and all employees and subsidiaries of the Company. Under the strategic goals, the Company identi?ed, assessed, monitored, andmanaged various risks in its business operation, and incorporated subsidiaries into the system of comprehensive risk management of theCompany.
Risk management
2023 Environmental, Social and Governance Report
2930
Sound OperationPracticing the Sustainability
Concept
Transformation &
BreakthroughPursuing InnovativeDevelopment Empowered byTechnology Finance
| 01 | 02 |
Common ProsperityCreating a Better Life withInclusive Finance
Constant E?ortSupporting the "Dual Carbon"Goal with Green Finance
| 03 | 04 |
Overall PlanningTransforming to the IntelligentFuture with Digital Finance
Organizational structure of risk management
Risk management system
Board of Directors：As the highest decision-making body for comprehensive risk management, it leads
the e?orts of comprehensive risk management
Board of Supervisors: As the highest supervision body for comprehensive risk management, it supervisesthe performance of duties by the Board of Directors and the management, and urges them for recti?cationManagement: As the management body for comprehensive risk management, it takes mainresponsibilities for comprehensive risk managementRisk Management Department: As the management body for the overall risk of the Company,
it submits proposals on risk management for business decision-making, and manages the riskmanagement tasks of subordinate departments, branches, and subsidiariesBusiness Departments, Branches, and Companies: As front-line bodies responsible forcomprehensive risk management, they promptly identify, assess, respond to, and reportrelevant risks, and assume direct responsibilities for comprehensive risk management
Basic Regulations for Risk Management:
Explain the core meaning of the comprehensive riskmanagement, sort out the organizational structure and division of duties for risk management, identifyand assess major risks, clarify the mechanism and implementation methods for risk management, andguide the Company for risk prevention
Core regulations:
Formulate a matrix for risk management on the basis of the various risks identi?edby the Company and the business types of the Company, and develop core regulations around specialtasks such as risk control indicator management and risk quota management
Specific implementation rules: Formulate specific implementation rules based on the coreregulations for risk management, and formulate speci?c risk management regulations around the riskmanagement measures, assessment, accountability methods, etc. of the Company
Layer 1
Layer 2
Layer 3
The Company carried out annual risk identi?cation, identi?ed six types of risks that may be faced in operation, and formulated risk managementplans and measures on this basis.Risk identi?cation and early management
●??
Established a risk quota management system and set the Company's marketrisk tolerance and overall risk quota
●??
Monitored market risk quota on a daily basis to give early warning and controlrisks in a timely manner
●?
?Analyzed and evaluated market risks through stress tests and multi-dimensional evaluation methods
●??
Clari?ed the organizational structure, division of responsibilities, managementprocess and cultural development of operating risks, and strengthened theresponsibilities of each line of defense for operating risks
●??
Continued to strengthen business process management and informationtechnology system
●??
Further enhanced the management capabilities for operating risks throughthe establishment and application of risk management tools such as key riskindicators for operating risks, loss data collection, and risk and control self-assessment
●??
Strengthened training and publicity, and strictly implemented accountability
●??
Established the system and process for risk management of new businesses
●??
Strengthened daytime liquidity management and daily?nancing management
●??
Implemented liquidity risk indicator monitoring and riskquota management
●??
Carried out liquidity management business for high-rated bond assets
●??
Established a three-level liquidity reserve pool, improvedthe Company's debt structure, strengthened ?nancingchannels, and established and improved the liquidityrisk management information system
●??
Conducted stress test on liquidity risk indicators, andapplied the stress test results to relevant decision-making processes of the Company
●??
Formulated an emergency plan for liquidity risks andconducted regular emergency drills
●??
Established the early assessment mechanism andemergency management mechanism for reputation risks,so as to proactively and e?ectively prevent reputation risksand respond to reputation risk events
●??
Established a media communication mechanism underuni?ed management
●??
Upgraded the digital management system for reputationrisks, carried out public opinion monitoring, research, andjudgment relying on information technologies, carried outhierarchical and classi?ed management of reputation riskevents, and improved the rapid response and disposale?ciency of reputation risks
●??
Upgraded the digital management system for reputationrisks, carried out public opinion monitoring, research, andjudgment relying on information technologies, carried outhierarchical and classi?ed management of reputation riskevents, and improved the rapid response and disposale?ciency of reputation risks
●??
Continuously strengthened institutional framework and consolidated theinformation technology security system
●??
Implemented hierarchical management of information systems andstrengthened the operation and maintenance support capabilities of importantinformation systems
●??
Established and improved an all-round information security protection system
●??
Strengthened safety awareness publicity and skill training of employees
●??
Established and strengthened the information security management system ofbranches
●??
Improved the mechanism for e?ective communication and sharing ofinformation technology risks
●?
In terms of securities credit business, the Company strengthened credit risk controlthrough due diligence, collateral and subject matter access management, concentrationcontrol, marking to market on a daily basis, strengthening real-time monitoring, etc.
●?
In terms of bond investment, the Company conducted whole-process managementof credit risks by assessing the risk status of issuers, setting access standards, timelyadjusting positions and clarifying the default disposal process
●?
In terms of the derivatives trading business, the Company controlled credit risks byconducting credit management for counterparties, using risk mitigation measures andclarifying the default disposal process
Response Measures
for Annual RiskIdenti?cation Results
Marketrisk
Creditrisk
Reputation
risk
Liquidity
risk
Operating
riskITrisk
2023 Environmental, Social and Governance Report
3132
Sound OperationPracticing the Sustainability
Concept
Transformation &BreakthroughPursuing InnovativeDevelopment Empowered byTechnology Finance
| 01 | 02 |
Common ProsperityCreating a Better Life withInclusive Finance
Constant E?ortSupporting the "Dual Carbon"
Goal with Green Finance
| 03 | 04 |
Overall PlanningTransforming to the Intelligent
Future with Digital Finance
In accordance withthe Regulations on the Supervision and Administration of Securities Companies,Measures for Compliance Management ofSecurities Companies and Securities Investment Funds, Guidelines for Implementation of Compliance Management of Securities Companies,and other relevant laws and regulations, the Company has formulated systems such as theBasic System of Compliance Management, Manualof Integrity Compliance, Measures for Compliance Inspection, andImplementation Rules for Compliance Accountability, managed thecompliance of our business activities and employees' professional behaviors through compliance review, supervision and inspection, andestablished a sound compliance management system.
Compliance management
Compliance management system of the Company
Responsible for determining the Company's compliance managementobjectives and assuming ultimate responsibility for the e?ectiveness ofthe Company's compliance management.Board of Directors
Responsible for implementing compliance management objectives,improving compliance management mechanism, and implementingcompliance management in daily operation and management.Operation Management
Responsible for reviewing, supervising and inspecting the complianceof the operation and management of the Company and its staff andtheir professional behaviors.Compliance O?cer and Compliance Department
Responsible for implementing their own compliance managementrequirements and taking responsibility for their own compliantoperation.Heads of all departments, branches and subsidiaries
Responsible for the compliance of all business matters and professionalpractices within the scope of their own business activities.All employees
The Company held the second risk management work conference of the Group in 2023To further implement the spirit of our main leaders' speech at the 2023 semi-annual work conference, comprehensively summarize ourrisk management e?orts in the ?rst half of 2023, and start the work of consolidated ?nancial statements, the Company held the second riskmanagement work conference of the Group in 2023. Risk management personnel of all departments and branches of the headquarters,persons in charge of risk management of subsidiaries and relevant personnel attended the conference.The conference put forward requirements for high-quality risk management in the second half of the year. First, we shall deeply understandthe overall situation, adhere to the bottom line of risk and pay close attention to key projects; Second, we shall deeply understand long-term consciousness to create a century-old company with a long-term view; Third, we shall deeply understand the service consciousnessand promote collaborative development through empowerment. The conference also carried out special training on risk management,and external experts introduced the regulatory dynamics and industry practices of comprehensive risk management and the consolidated?nancial statements of the Group, laying a solid theoretical foundation for the subsequent tasks on consolidated ?nancial statements.
In 2023, the CompanyHas consecutively received the A-Class A-Grade rating in the Securities Regulatory Commission's classi?cationevaluation of securities companies for 9 years, and has now been included in the white list of securities companies
Regular meetings and diverse activities
The Company held the ?rst risk management work conference of the Group in 2023To implement the instructions of the Party Committee on making every e?ort to build Caitong featuring scienti?c innovation, services,platform, and reform, iteratively update the "137N" innovative development strategy, enhance risk awareness and capability, and improverisk management, the Company held the ?rst risk management work conference of the Group in 2023. Risk management personnel of alldepartments and branches of the headquarters, persons in charge of risk management of subsidiaries and relevant personnel attendedthe conference.The meeting emphasized that all business departments of the Company should strictly observe the general goal of eliminating risks andguaranteeing security, fully realize that there may be new risks under the new development pattern, and carry out the innovation andbreakthrough in methods and tools for risk management. The meeting analyzed the risks faced by the Company under the new economicsituation in 2023, and emphasized that the Company should be committed to ensuring the dynamic balance between risks and returns,match risk management capabilities with business expansion, and promote steady development. The meeting also carried out specialtraining on risk management, which further publicized and developed our risk management culture.
●?
Issued the risk management culture development plan to resolutely implement the speci?c tasks of risk culture development,publicize the risk management concept, and promote the integration of risk management and business development.
●?
Organized multi-level and multi-type exchanges to enhance risk management awareness and capability, produced a series ofprofessional courses on risk control knowledge, and organized group risk management meetings, special trainings, regularmeetings of business departments, periodical publications, etc. to publicize the Company's risk culture, interpret risk policies,and output the risk management concept and professional experience.
●?
Gave full play to the leading role of assessment and revisedthe Measures for Risk Management AssessmentandDetailed Rulesfor Risk Management Assessment of Subsidiariesto optimize assessment indicators, strengthen the performance assessmentsystem linked to the risk management performance, and enhance the risk awareness of all employees.
2023 Environmental, Social and Governance Report
3334
Sound OperationPracticing the Sustainability
Concept
Transformation &BreakthroughPursuing InnovativeDevelopment Empowered byTechnology Finance
| 01 | 02 |
Common ProsperityCreating a Better Life with
Inclusive Finance
Constant E?ortSupporting the "Dual Carbon"
Goal with Green Finance
| 03 | 04 |
Overall PlanningTransforming to the Intelligent
Future with Digital Finance
The Company revised the Compliance Management Measures for Employees' Behaviorsandthe Professional Integrity Management Measures,and amended the content of the Compliance and Integrity Commitment to clarify the red line and bottom line of employees' practice.The Company completed more than 50 compliance inspections of headquarters departments, investment bank projects, branches andsubsidiaries throughout the year, with the annual coverage of compliance inspections reaching more than 60%.In 2023, the Company launched the self-developed "Empowerment Service Center" to create a standardized and digital window for the middleand back offices serving the front office. By the end of the reporting period, the Empowerment Service Center recorded 106 empowermentservices which were provided to 42 business departments and branches of the headquarters in total.The Company formulated and promoted the implementation of the 2023 Compliance Culture Publicity Plan. With the "Compliance Window"and the Company's online learning platform as the carrier, the Company carried out more than 100 special trainings and publicity through shortvideos, briefings, fun activities, publicity month, case reports and tests for compliance personnel, wealth consultants, unit heads, and newemployees.
The Company strengthened anti-corruption management and set up a professional integrity management structure. The Party Committeeof the Company is the highest responsible body for integrity management, the principal person in charge of the Company is the ?rst personresponsible for performing integrity management responsibilities, and the heads of departments and subsidiaries perform their managementduties within the scope of their responsibilities.
Improving the compliance system
Carrying out in-depth compliance inspection
Iterating intelligent compliance system
The Company publicizes the discipline inspection mailbox and the complaint mailbox through its o?cial website and other channels. Any violationscan be reported through the mailboxes, and real-name reporting is encouraged. To protect whistleblowers, the Company strictly abides by theWorking Rules for Discipline Inspection and Supervision Organs to Handle Accusations and Complaints, and strictly keeps con?dential the acceptanceand investigation of accusations and complaints, as well as the name, the company, home address and other information of the informants andcomplainants and the details of accusations and complaints. If any institution or individual is found to attack or retaliate against the informant underany excuse, the leadership of the Company shall be informed immediately and deal with the matter seriously according to relevant provisions. If thecrime is constituted, such institution or individual shall be transferred to the judicial organ according to law.
Reporting channels and whistleblower protection
The Company develops the integrity culture through onlineand offline means, and provides anti-corruption training for allemployees, including shareholders, contracted workers andtemporary laborers. The Company launched an education platformcalled "Clean Caitong", opened a Caitong column on the onlinelearning platform, and carried out a series of integrity activities.Besides, Party organizations at all levels, branches, business outlets,and subsidiaries held a number of o?ine activities to publicize theconcept of "diligence and integrity".
Training and integrity culture development
Strengthening compliance publicity
Abiding by business ethics
In 2023, the Companyreleased 44 pieces of informationon integrity and self-discipline
through various channels
The integrity education video wasviewed by 18,226 person-times
Employees received
13.57 hours
of anti-corruption training on average
The Company has established and improved its internal control and management system against money laundering risks in strict compliance with the
Anti-money Laundering Law of the People's Republic of China, the Measures for the Supervision and Administration of Combating Money Launderingand Financing of Terrorism by Financial Institutions, and other laws and regulations, so as to thoroughly ful?ll its anti-money laundering obligationsand actively employ information technologies to improve the e?ciency of anti-money laundering e?orts.In 2023, our anti-money laundering was advanced steadily with inspection and recti?cation as main tasks. We implemented the anti-money launderingrecti?cation requirements by improving the internal control mechanism, optimizing the supporting system, strengthening supervision and inspection,and other measures, and explored the practical application with the "risk-based" principle. We made great progress in improving quality and e?ciency.
Anti-money laundering managementThe Company strictly abides by the Provisions on the Professional Integrity of Securitiesand Futures Business Institutions and Their Employees, Opinions on Strengtheningthe Prevention and Control of Professional Integrity Risk of Third Parties Retained bySecurities Companies in the Investment Banking Business and other requirements,adheres to the working concept of "integrating integrity and development", establishesand improves the long-term management mechanism. The Statement on IntegrityManagement of Caitong Securities Co., Ltd. was formulated and issued to establish aclosed-loop management system before, during and after the event and to strengthenthe prevention and control of integrity risks.
Anti-corruption management
formulated 5
new anti-corruption systemsrevised
relevant system
In 2023, the Company
Integrity Education
2023 Environmental, Social and Governance Report
3536
Sound OperationPracticing the Sustainability
Concept
Transformation &
BreakthroughPursuing InnovativeDevelopment Empowered byTechnology Finance
| 01 | 02 |
Common ProsperityCreating a Better Life with
Inclusive Finance
Constant E?ortSupporting the "Dual Carbon"Goal with Green Finance
| 03 | 04 |
Overall PlanningTransforming to the IntelligentFuture with Digital Finance
In 2023, the Company launched the anti-money laundering publicity month with the theme of "Beware of Money Laundering Traps, Stay AwayFrom Money Laundering Crimes", issued 9 relevant articles, and organized relevant knowledge competitions with more than 20,000 participants.Through these e?orts, we e?ectively ful?lled our social responsibility of anti-money laundering. In addition, the headquarters of the Companyorganized 13 anti-money laundering training sessions and attended 7 external anti-money laundering training sessions throughout the year.In 2023, the Company formulated 2 anti-money laundering internal control systems, revised 2 related systems, issued 3 supporting letters,and developed and issued theAnti-money Laundering Work Guidelines for Branches. Through such efforts, we further clarified the divisionof responsibilities, refined the management requirements related to anti-money laundering such as customer due diligence, customer riskclassi?cation, suspicious transaction monitoring and reporting, list monitoring, anti-money laundering investigation, and system construction,and standardized the operation process. According to organizational adjustments and anti-money laundering requirements, the Companyimproved the organizational structure of anti-money laundering by appointing 2 new members to the anti-money laundering leading group.The Company also started to optimize the anti-money laundering operation mode. We reviewed and approved theImplementation Plan ofAnti-Money Laundering Centralized Operation Mode, and transferred certain important and di?cult tasks to the anti-money laundering leadingdepartment of the headquarters and the competent business department of the headquarters respectively according to the positioning ofresponsibilities, which further enhanced the quality and e?ciency of our anti-money laundering e?orts.
Re?ning the internal control mechanism on anti-money laundering
The Company has built an anti-money laundering information system with functions such as risk monitoring, regulatory submission, intelligentanalysis, and diverse interaction. The system has set up all business modules on anti-money laundering, including list monitoring, customerdue diligence, customer money laundering risk classification, suspicious transaction monitoring and reporting, and money laundering riskassessment. By the end of the reporting period, the self-assessment system for money laundering risks of the Company was able to monitor,warn, analyze, and report suspicious risks in real-time and dispose of risks in a closed loop through the full-process trace management, whichhelped the management timely understand the money laundering threats faced by the Company and the e?ectiveness of control measures.In 2023, the Company completed the function optimization of the anti-money laundering list monitoring system; launched a self-developedassociation query platform to help identify and discover associated accounts and customers; upgraded the anti-money laundering system andcompleted the sorting of the requirements of the anti-money laundering data mart; independently developed suspicious transaction monitoringmodel and customer money laundering risk rating model, and achieved phased results. The Company also guided the brokerage, investmentbank and research report business lines to improve the supporting functions for their business system. The anti-money laundering system wasable to connect to the commission sales system of ?nancial products, the investment advisory system of funds and the custody system.
Empowering anti-money laundering with technology
The Company continued to carry out anti-money laundering inspections and audits. We carried out anti-money laundering special inspectionsand audits for more than 106 branches and headquarters departments, and guided responsible departments to formulate recti?cation plansand implement recti?cation requirements for the problems found. The Company actively carried out special investigations. We organized theinvestigation of risks related to the multi-bank depository business by a single customer and the implementation of anti-money launderingrequirements of frozen customers by competent authorities, which further strengthened the management of risky customers and theimplementation of anti-money laundering requirements in key areas and risky links. In addition, the Company has established monthlybranch meeting mechanism to synchronize daily management and timely discover problems, e?ectively improving the anti-money launderingawareness and duty performance of our employees.
Strengthening inspection and supervision of anti-money laundering
Carrying out anti-money laundering training and culture publicity
The Company issued theSupplier Management Rules of Caitong Securities (Trial), established the supplier evaluation mechanism, andintensi?ed daily management by establishing and maintaining quali?ed supplier database and identifying and dealing with bad behaviors toprovide support for bidding and procurement, prevent procurement risks, and improve the quality and efficiency of procurement. Also, theCompany emphasizes the management and transparency of the supply chain, and clearly requires the audit of labor standards in the regionswhere our suppliers are located and the inspection of the sustainability management of suppliers to ensure the strict control over the supplychain risks.
Supplier management
Classi?cation of suppliers
Classification of suppliers
Potential suppliersAlternative suppliers
Suppliers on the black listSuppliers on the yellow listSuppliers on the green list
Contracted suppliers
List of qualified suppliers
Anti-money Laundering Activities
2023 Environmental, Social and Governance Report
3738
Sound OperationPracticing the Sustainability
Concept
Transformation &BreakthroughPursuing InnovativeDevelopment Empowered byTechnology Finance
| 01 | 02 |
Common ProsperityCreating a Better Life withInclusive Finance
Constant E?ortSupporting the "Dual Carbon"
Goal with Green Finance
| 03 | 04 |
Overall PlanningTransforming to the IntelligentFuture with Digital Finance
Transformation & BreakthroughPursuing Innovative DevelopmentEmpowered by Technology Finance
Enhancing the Level of Industrial DevelopmentLeveraging a New Growth Pole for Industrial Development
Enhancing the Level of Industrial Development
In line with the national technology development strategy, Caitong Securities focuses on key sectors such as "specialized, excellent, featured,and innovative" enterprises, sci-tech innovation enterprises, and strategic emerging enterprises, with a view to comprehensively improve thequality and e?ciency of ?ntech innovation.
Caitong Investment Bank focuses on specialized, excellent, featured, and innovative enterprises to continuously improve the quality ande?ciency of ?ntech innovation. In 2023, we helped 2 enterprises pass the IPO review and 4 enterprises complete the share o?ering.
Leveraging sci-tech innovation bonds, the Company innovates on the application of products andstrengthens the precise support and direct funding of the bond market for technological innovation. Wecompleted the underwriting of sci-tech innovation bonds of CNY3.206 billion in total.Exploring sci-techinnovation bonds
The Company also plans to build a direct ?nancing digital-intelligence ecosystem in Zhejiang Province, i.e.the "Easy Investment in Zhejiang" platform, so as to provide accurate, e?cient and convenient ?nancingservices for sci-tech innovation enterprises and specialized, excellent, featured, and innovative enterprises.Building a digital-intelligence ecosystem
Leveraging a New Growth Pole for IndustrialDevelopment
The Company gives full play to the investment linkage advantage of the Group, and plans to set up market-oriented equity investment funds in sci-tech innovation and manufacturing during the "14th Five-Year Plan"period. The funds focus on investing in the "No. 1 development project" on digital economy innovation,advanced manufacturing projects, and scienti?c achievements transformation projects of technology innovationplatforms above the provincial level.Giving full play to theinvestment linkage
advantage
Lead with the material industry, ZJU Holdings, etc., jointly initiated the formation of a total size of 4 billion yuan of Zhejiang City WestScience and Technology Innovation Manufacturing Mother Fund, is expected to leverage social capital of more than 40 billion yuan.
Establish a Fund of Funds for scienti?c and technological innovation in manufacturing
Strategic cooperation with ZJU and ZJU Computer ResearchInstitute to accelerate the cultivation of advanced technologiessuch as arti?cial intelligence, 5G and network security.·Co-establishment of Innovation Base·Scienti?c and technological projects·Cooperation with the Science and Education Fund·Talent Exchange and International Cooperation
Industry-academia-fusion linkage to support the
digital economy
Setting up a 3 billion yuan investment fund to invest in DongyangSunshine Group, and recruiting big and strong for the three majorindustries of capacitors, deep processing of Cordyceps sinensisand new energy in Dongyang City, with an expected investmentscale of 5 billion yuan in ?xed assets, realizing an annual outputvalue of 20 billion yuan.
Fund investment landing major projects
Since 2023, Caitong Capital has successfully established six technology innovation funds with a total scale of CNY6.9 billion, amongwhich 2 Fund of Funds have a scale of CNY5 billion, and the remaining 4 focus on technology innovation enterprises in the provincewith a total scale of CNY1.9 billion.Guided by the national strategic support orientation, Caitong Innovation focuses on the construction of three technological innovationhighlands in Zhejiang, vigorously supported technological enterprises and specialized, excellent, featured, and innovative enterprises,deeply served technological innovation, and re?ned the industrial chain. Of the 8 listed investee companies, 6 are listed on the STARmarket. Technology innovation enterprises account for 80% of the projects invested by Caitong Innovation.
Supporting technology enterprises through the fundNational-level Specialized, Fine, Unique, and Innovative
2023 Environmental, Social and Governance Report
4142
Sound OperationPracticing the Sustainability
Concept
Transformation &
BreakthroughPursuing InnovativeDevelopment Empowered by
Technology Finance
| 01 | 02 |
Common ProsperityCreating a Better Life with
Inclusive Finance
Constant E?ortSupporting the "Dual Carbon"Goal with Green Finance
| 03 | 04 |
Overall PlanningTransforming to the IntelligentFuture with Digital Finance
Caitong Innovation has carried out in-depth cooperation with Geely Holding, a chain enterprise in the province, and jointly initiatedthe establishment of an equity investment fund. Through their active interaction and cooperation, an investment linkage mechanismsharing think tanks and information has initially taken shape, which focuses on strategic emerging industries in the province andaims to support the development and growth of technology innovation enterprises, so as to jointly build a sound ecology of sci-techinnovation investment in Zhejiang, strongly boost the "sweet potato economy", and improve and upgrade the "No. 1 opening-upproject".
CaseCarrying Out In-depth Cooperation with the Chain Enterprises in the Province to Create a Sound Investment Environment
Caitong Capital, together with Wuchan Zhongda, Zhejiang University Holding Group, and Hangzhou Chengxi Sci-tech InnovationCorridor Management Committee, jointly launched Hangzhou Chengxi Sci-tech Innovation Corridor Fund of Funds with a total scale ofCNY4 billion, which is expected to mobilize social capital of CNY40 billion and was o?cially put into operation in August 2023. The fundaims to inject strong impetus into the innovation and development of Hangzhou Chengxi Sci-tech Innovation Corridor, help it becomean innovation cradle and a comprehensive science center, and build a digital industry cluster with global in?uence.
Formation of a science and innovation master fundCase
The list of the eighth batch of national manufacturing individual champions was announced, and Ningbo Huikang Industrial Scienceand Technology Co., Ltd. invested by Cai Tong Capital was listed among them, highlighting its hardcore manufacturing strength in the?eld of refrigeration equipments represented by ice-making machines. The requirements for the selection of manufacturing industrychampions are stringent, and the ?nalists need to have better innovative basic conditions and strong technological innovation ability,production technology or process up to the international advanced, domestic leading, single product market share in the globalforefront, is the highest level of sub-sector, the strongest market strength of the benchmark, but also the development of the newquality of productive forces of the front-runner, the leading geese. At present, there are only about 1,574 national manufacturing singlechampion enterprises in China, far less than the 12,000 specialized, special and new "small giant" enterprises.
CaseHuikang Technology, a portfolio company of Cai Tong Capital, was selected as a national manufacturing champion
2023 Environmental, Social and Governance Report
4344
Sound OperationPracticing the Sustainability
Concept
Transformation &
BreakthroughPursuing InnovativeDevelopment Empowered byTechnology Finance
| 01 | 02 |
Common ProsperityCreating a Better Life withInclusive Finance
Constant E?ortSupporting the "Dual Carbon"Goal with Green Finance
| 03 | 04 |
Overall PlanningTransforming to the IntelligentFuture with Digital Finance
Common ProsperityCreating a Better Life with InclusiveFinance
Promote the construction of demonstration zones for common prosperityServing the whole life cycle of enterprisesProtecting the rights and interests of employeesAdhering to public welfare and charityLaying out pension ?nance
Promote the construction of demonstrationzones for common prosperityThe Central Financial Work Conference explicitly requires working on inclusive finance, which provides important guidance for promotingcommon prosperity through the high-quality development of inclusive finance. As a provincial state-owned securities firm in Zhejiang, theCompany gave full play to the advantages of regional characteristic industries, aggregated ?nancial resources, and went all out to move forwardin the "four steps" of finance, intelligence, industry, and consumption assistance. It explored new models to assist rural revitalization, withevery effort made to promote financial knowledge into the countryside, improve material and intellectual support, and help enterprises inimpoverished areas to accurately ?nance their businesses, making further contributions with its ?nancial strength in the pursuit of commonprosperity.Working together for common prosperity
The Company kept in mind its responsibility of serving people, adhering to the use of finance for benefits and conveniences to the public.Leveraging its business advantages, with the integration and utilization of the three major financial service tools of "investment banking,investment, and wealth management", the Company deeply explored regional investing and financing capacities to drive local economicdevelopment with financial resources, helping create wealth and bring a leapfrog high-quality growth to mountainous and coastal islandcounties. Meanwhile, the Company supported the development of rural characteristic industries, and expanded channels for farmers to increasetheir income, taking multiple measures to comprehensively revitalize rural industries, talents, cultures, ecology, and organizations towardscommon prosperity.
Contribution to common prosperity with great e?orts on three major projectsFurther implement the revenue-enhancing project for urban and ruralresidents, o?ering more high-qualityproducts for "common prosperity"
In 2023, the Company sold a total of 435 products of di?erent kinds for common prosperity,including Gongfutong Break-even Income Certi?cate, Caihuitong, Caiyuntong, Caiying Co-prosperity Series, ESG bonds, Jufeng, and low-?uctuation publicly o?ered funds, with salesreaching CNY17.472 billion.Further implement the digital andintelligent co-prosperity innovation andquality improvement project, seekingto build a comprehensive ?nancialservice system for the whole life cycle ofenterprises
Measures of the Company included building an eco-digital system for direct ?nancingfor the province, creating an "Easy Investment in Zhejiang" direct investment and?nancing platform; optimizing the ESOP system of Jinfubao · Listed Stocks, to providecomprehensive ?nancial services for listed companies and potential listed companies withemployee stock ownership; expanding and promoting Jinfubao ? MSMEs, to help MSMEssolve pain points.Further implement the project ofstrengthening mountainous and coastalisland counties, creating a model of"common prosperity" in mountainousareas
Based on strategic cooperation, the Company worked to enhance the level ofcomprehensive ?nancial services, preferentially setting up branches in mountainous andcoastal island counties, with 23 branches already put in place in such areas representing acoverage rate of 71.88%.
In 2023, the Company fully leveraged the three major financial service tools of "investment banking, investment, and wealthmanagement" as a propeller to build a model for common prosperity. By using the investment banking tool to assist mountainous andcoastal island counties in smooth ?nancing, a complete bond ?nancing of CNY10.5 billion was recorded in such areas; By using theinvestment tool, Changshan Youfu Equity Fund, Wuyi Jinwu Minfu Fund, Huzhou Huantaihu Mutual Wealth Fund, etc. were launched,with the ?rst phase of implementation scale reaching CNY750 million; By using the wealth management tool, wealth managementproducts for common prosperity with low threshold, low charge, low fluctuation and stable income were developed and madeavailable for residents. Meanwhile, the Company launched a series of ?nancial activities for supporting enterprises under the themeof "Wealth for Zhejiang Merchants", organizing special events to cover over 3,000 merchants and enterprises in Zhejiang Province,vitalizing the real economy with ?nancial resources and driving common prosperity with the power of ?nance.
CaseBeing a "Pioneer" on the Road to Common Prosperity
Caitong Securities Asset Management, a subsidiary, initiated the "1-Mu Tea Garden" public welfare project for agricultural support inYongxing Village, Caiyuan Township, Suichang County, Lishui City, Zhejiang Province. Starting from improving the local tea industry,it has successfully activated the collective economy of Yongxing Village, and enhanced the lives of villagers, raising the collectiveeconomy of this village from zero to CNY300,000, with a signi?cant e?ect in supporting agriculture.In order to better help Caiyuan Township achievecommon prosperity, and further improve the "1-Mu Tea Garden" cooperation model, CaitongSecurities Asset Management launched the "1-Mu Tea Garden" Common Prosperity Fund with aninvestment of CNY2.0 million. On April 20, 2023,the People's Government of Caiyuan Townshipand Caitong Securities Asset Management enteredinto an agreement to jointly establish the "1-Mu Tea Garden" Common Prosperity Fund.With the establishment of such a fund, a betterand deeper partnership will be built betweenCaiyuan Township and Caitong Securities AssetManagement, providing important impetus forempowering the construction of demonstrationareas for common prosperity, stimulating ruralareas to form self-development mechanisms, andachieving leapfrog high-quality growth.
CaseCaitong Securities Asset Management Established the "1-Mu Tea Garden" Common Prosperity Fund
2023 Environmental, Social and Governance Report
4748
Sound OperationPracticing the Sustainability
Concept
Transformation &BreakthroughPursuing InnovativeDevelopment Empoweredby Technology Finance
| 01 | 02 |
Common ProsperityCreating a Better Life with
Inclusive Finance
Constant E?ortSupporting the "Dual Carbon"
Goal with Green Finance
| 03 | 04 |
Overall PlanningTransforming to the Intelligent
Future with Digital Finance
Entering into the Agreement on the "1-Mu Tea Garden" Common Prosperity
Fund Between Caitong Securities Asset Management and the People's
Government of Caiyuan Township
Measures of the Company for investor education in 2023:
Continuously optimizing the construction of the national-level physical base
●??
Comprehensive improvements were made to the software and hardware equipment as well as the exhibition content of the base;
●??
A fully registered exhibition themed at City Tour of Caixiaotong and a red ?nance-month exhibition themed at Tracing the Sourceand Pursuing Common Prosperity were carefully prepared and launched;
●??
185 themed activities on investor education were carried out within the year;
●??
In 2023, Caitong Securities was recognized as a "Research and Practice Education Base for Primary and Secondary SchoolStudents in Zhejiang Province".Building the ?rst county-level base in the province
●??
Qingtian Overseas Chinese Investor Education Base, the ?rst pilot county-level physical investor education base, was establishedin Qingtian County, Lishui, Zhejiang Province, to help build the "Qingtian Model" as a county-level demonstration zone for commonprosperity;
●??
During the reporting period, a total of 12 themed activities on investor education were carried out.Carrying out the special event of the year on investor education under "Caitong Path to Financial Management"
●??
A total of 1,542 investor education activities were carried out in the mode of "invite in" and "go out", covering nearly 400,000
person-times of investors;
●??
Among them, 167 activities were conducted in mountainous and coastal island counties, covering nearly 20,000 person-times of
people there.
Launching the campaign "Investor Education in 100 Schools"
●??
A total of 251 activities were held throughout the year, covering more than 40,000 students;
●??
Among them, 14 public welfare activities were provided for students in mountainous and coastal island counties, with high-quality?nancial books donated to optimize rural education resources.Outputting original products through diversified promotion channels
●??
The quality and efficiency of publicity were further improved by virtue of the five-in-one promotion channels of doublebases, business venues, websites, and WeChat o?cial accounts for investor education, combined with active cooperation withmainstream media;
●??
Internal and external resources were integrated for the R&D of various original products taking advantage of multiple platforms,producing over 1,600 types of original investor education products in such forms as videos, posters, graphic comics, books andmanuals, H5 games, and interactive tools, etc., with a total of more than 2,300 news reports and over 30 million clicks.Undertaking the 2023 investor rights and interests knowledge competition for Shareholders Coming
●??
The event attracted 4.15 million person-times of registrants, which the Caitong Securities team outperformed winning both thepreliminary and ?nal championships;
●??
Capitalizing on hosting the competition, the Company launched nearly 500 online and offline activities under the theme of"Welcoming the Asian Games, Pursuing Common Prosperity", with over 1,000 promotional reports, covering more than 650,000person-times of investors.
Establishing a life account of Caitong Securities on Alipay
●??
A life account of "Caitong Securities" on Alipay was established whereby to release cutting-edge ?nancial information, interpretmarket trends, clarify investment logic, and ensure gap-free information for investors.
Providing ?rst-rate investor educationIn 2023, the Company carried out a series of activities around the progress of the capital market and the hot spots in such a market, furtherimplementing the political and people-oriented requirements of the Party Committee of the China Securities Regulatory Commission on capitalmarket supervision, strengthening the function of investor education to support "common prosperity", and e?ectively ful?lling the responsibilityof protecting the legitimate rights and interests of investors, to move forward the investor education work, and boost the three "No.1 projects".
2023 Environmental, Social and Governance Report
4950
Sound OperationPracticing the Sustainability
Concept
Transformation &BreakthroughPursuing InnovativeDevelopment Empoweredby Technology Finance
| 01 | 02 |
Common ProsperityCreating a Better Life with
Inclusive Finance
Constant E?ortSupporting the "Dual Carbon"Goal with Green Finance
| 03 | 04 |
Overall PlanningTransforming to the IntelligentFuture with Digital Finance
Protecting the rights and interests of employees
Full life-cycle services for SMEs
The Company is committed to providing employees with an equal and impartial work environment and development platform, ensuringthat all employees have fair job opportunities, focusing on building a diversi?ed talent team, and developing a legal employment system instrict accordance with the requirements of documents such as the Labor Law of the People's Republic of China, the Labor Contract Law of thePeople's Republic of China, the Law of the People's Republic of China on the Protection of Women's Rights and Interests, and the Regulationson the Prohibition of Child Labor. Emphasizing employee satisfaction, the Company has built an open and democratic communication platformwhereby to e?ectively safeguard the rights and interests of employees.
Caitong Investment Bank kept improving its mode for serving the whole life cycle of enterprises, accompanying the leapfrog growth ofenterprises with comprehensive ?nancial services, with several typical cases represented by SLING created showing its service achievements.Since 2015, Caitong Investment Bank has assisted SLING in listing on the NEEQ, completing two equity incentive plans, locating targets of andaccomplishing acquisition twice, and connecting with investment institutions for ?nancing. Through nearly nine years of accompanying services,it helped SLING successfully list on the GEM in September 2023. Additionally, with reinforced work on the construction of pilot bases, a "Four-One" full life cycle inclusive ?nance service model has been preliminarily formed.
The Company sought to bring more care to the employees in need, with various measures taken to truly highlight the warmth of the CaitongSecurities as a "Big Family", foster the "Family Culture", and further enhance the cohesion, creativity, and ?ghting capacity of Caitong people.
Equal and diversi?ed employmentThe Company has formulated the Employee Recruitment and Employment Management Measures of Caitong Securities,adhering to therecruitment philosophy of equality, openness, inclusiveness, and diversity, respecting the basic human rights of employees, honoring the values,personalities, and privacy of employees with di?erent cultural backgrounds, strictly prohibiting screening and restricting employees in terms ofgender, race and ethnicity, etc., resolutely eliminating the employment of child labor and any form of forced labor, strictly verifying the identityof employees, and regularly monitoring and inspecting the employment intensity and the human rights system evaluation. During the reportingperiod, the Company did not engage in any violations such as the use of forced labor and child labor.In 2023, the Company
Total number ofemployees reached
5,026
minority employees
veteran employees
employees outside ChineseMainland (including HongKong, Macao, and Taiwan)
100% labor contract signing rate of the Company
Optimization and improvement ofthe rest and recuperation system
| 2 | 3 |
Remuneration and promotion
mechanisms
Optimizing and improving thegrades of low-grade employees
Building a family culture brand for "Three Practical Things"
56%
10%
33%
1%47%
53%
32.6%
56.6%
10.2%
0.6%
Diversi?ed Composition of Employees
FemaleMale
Below bachelor degreeBachelor degreeMaster degreeDoctoral degree35 years old and below36 to 45 years old46 to 55 years old56 years old and above
By genderBy age
By educationalbackground
Note: The statistical caliber of the employee composition performance table covers the parent company and major subsidiaries.
2023 Environmental, Social and Governance Report
5152
Sound OperationPracticing the Sustainability
Concept
Transformation &BreakthroughPursuing InnovativeDevelopment Empoweredby Technology Finance
| 01 | 02 |
Common ProsperityCreating a Better Life withInclusive Finance
Constant E?ortSupporting the "Dual Carbon"
Goal with Green Finance
| 03 | 04 |
Overall PlanningTransforming to the IntelligentFuture with Digital Finance
Deepening Employee CommunicationSupporting employee development
The Company has developed the Employee Director and Employee Supervisor System whereby to elect employee directors and employeesupervisors in accordance with laws and regulations. As representatives and defenders of employees' interests, employee directors andemployee supervisors gave full play to their role as a bridge between the Board of Directors and the Board of Supervisors to speak up foremployees and ensure their rights and interests.To ensure the rights of employees to participate in democratic decision-making, management, and supervision, the Company has established,improved, and implemented an employee representatives meeting system, a collective negotiation system, as well as a normalized mechanismfor soliciting, reviewing, handling, and implementing proposals from the employee representatives meeting, providing smooth communicationchannels for employees, and allowing full play to the positive role of employees in advising and counseling. Meanwhile, the Company hasestablished trade union organizations at various levels to timely help employees solve problems in work, life, and other aspects. In addition, theCompany also has a women's work committee to e?ectively safeguard the legitimate rights and interests of female employees.
Laying emphasis on improving the quantity and quality of professional talents, and keeping in mind the value concept of respecting, gathering,and serving talents, the Company arranged various training based on the different levels, development goals, and stage-specific abilityrequirements of employees.
In 2023, the Company
held 5 employee representative meetings and responded to 10 proposals on site, witha 100% response rate to proposals
In 2023, the Company
Employee training by job grade
Total number of employeesreceiving training
4,232
Number of junior employees receiving training4,061
Total training hours received by junior employees341,258
Number of middle management receiving training
Number of senior management receiving training
Total number of training hours received by middlemanagement
16,021Total number of training hours received by seniormanagement
Employee trainingcoverage rate
94.17%
Total training hours received byemployees357,803
Average training hoursper employee
79.62
A total of 13 continuing education support projects were enabled for employees to obtain vocationalqualifications, improve their educations, etc.A total of 28 persons/person-times participated in the continuing education support projects, of which 11 obtainedrelevant certifications
2023 Environmental, Social and Governance Report
5354
Sound OperationPracticing the Sustainability
Concept
Transformation &
BreakthroughPursuing InnovativeDevelopment Empoweredby Technology Finance
| 01 | 02 |
Common ProsperityCreating a Better Life withInclusive Finance
Constant E?ortSupporting the "Dual Carbon"Goal with Green Finance
| 03 | 04 |
Overall PlanningTransforming to the Intelligent
Future with Digital Finance
Paying attention to employee healthImproving remuneration and incentive mechanisms
Attaching great importance to the occupational health and safety of its employees and the prevention of occupational diseases, theCompany continuously improved the employee health security system, took out social insurance including pension insurance, medicalinsurance, unemployment insurance, maternity insurance, and work-related injury insurance for all employees according to law together withsupplementary medical insurance and accident insurance, closely followed the national regulations on annual leave and maternity leave, etc.,regularly arranged physical examinations, health retreat, and kept an eye pm the mental health status of employees, to ensure health of allemployees. In addition, the Company provided employees with gyms, cafeterias, and medical rooms, encouraged employees to be physicallyactive, and strictly controlled the quality of dishes to guarantee employee health from the source and enhance employee happiness.
The Company's remuneration mainly consists of ?xed wages, performance bonuses, allowances, and bene?ts. The performance bonuses forsenior management of the Company shall be determined by the Board of Directors based on the annual performance appraisal results of theformer, to be paid in a deferred manner; while those for sta? in business divisions and functional departments will be paid after the annualappraisal according to the annual performance plan.
In 2023, the Company
had a total of 2,400 person-times employees participated in theCompany's health retreats
the coverage rate of physical examinations for all employeesreached100%
In order to encourage employees to take active exercise,energize them, and vitalize the enterprise, takingadvantage of the upcoming 19th Asian Games in Hangzhou,the Company held a one-day fun sports event on June3, 2023, around the theme of "Forging ahead for ThirtyYears, Collaborating for the Asian Games". This sportsevent was participated by 25 teams from the headquarters,subsidiaries, and branches throughout the country, withnearly a thousand employees uniting for Caitong Securitiesto extend its 30-year history and forge ahead toward apromising new future.
CaseBeing Stronger with Sports
Site of the Sports Event
Employee remuneration management system
Develop remuneration management measures for middle and back o?ce employees in the headquarters, as well as remunerationmanagement systems for employees in branch offices and various business lines; Regularly organize external remunerationbenchmarking, properly regulate the remuneration criteria and structure for di?erent types of employees on the development ofthe Company's business and the improvement of talent capabilities, and establish a dynamic remuneration adjustment mechanismto dynamically adjust the remuneration level of employees taking into account such factors as job grade changes, appraisal results,and job values, e?ectively motivating high-performance employees.Competency-based MD job grade management systemForm a comprehensive MD job grade system covering all lines, based on abilities, performance, and quali?cations, under which therole positioning, basic conditions, and adjustment rules for each job grade are de?ned to improve the scienti?c nature of appraisalmechanisms as well as personnel promotion channels.
Employee performance appraisal system
Formulate implementation rules for employee performance appraisal, according to which, individual goals of employees, overallstrategic goals of the Company, annual business plans, and corporate culture construction shall be organically integrated, mandatoryappraisals shall apply to all employees, and feedback on the appraisal results shall be constantly strengthened. Employeeperformance bonuses are linked to the overall performance of the Company as well as the appraisal results of departments andemployees, encouraging employees to make greater contributions to the overall performance improvement of the Company and thedepartments.
2023 Environmental, Social and Governance Report
5556
Sound OperationPracticing the Sustainability
Concept
Transformation &BreakthroughPursuing InnovativeDevelopment Empoweredby Technology Finance
| 01 | 02 |
Common ProsperityCreating a Better Life with
Inclusive Finance
Constant E?ortSupporting the "Dual Carbon"
Goal with Green Finance
| 03 | 04 |
Overall PlanningTransforming to the Intelligent
Future with Digital Finance
To better practice the new style of "Loyalty,Responsibility, Struggling, Innovation, andIntegrity" in state-owned enterprises, create astrong "Family Culture", and demonstrate thespirit of "Pursuing Dreams" of Caitong people, theCompany organized a Happy Run Event of "30-YearCaitong in Pursuit of Dream" on November 5, 2023.This event brought together colleagues of CaitongSecurities from the headquarters and branchesacross the country, where external guests were alsoinvited to join the group, through which, Caitongpeople were inspired to unify with each other,gather their strength, and work hard.
CaseCaitong Happy Run, Fostering Health Together
With the coming of Women's Day, the Company held the 2022 Women's Achievements Recognition Ceremony to honor the "Women'sModel Post" and "Caitong Rose" for the year 2022, further consolidating the consensus of family culture, uniting and leading femaleemployees to take on their roles, and contributing to the high-quality development of the Company with "Her-power".
CaseShowing Caitong's "Her-Power"
Site of the Happy Run Event
The Women's Achievements Recognition Ceremony
Site of the Employee Activity on the "Caitong Day"
Site of the High-quality Development Theme Event
Building cultural consensus
2023 is the beginning year of fully implementing the spirit of the 20th National Congress of the CPC, marking the 20th anniversary of carrying outthe "Double-Eight Strategy" in Zhejiang Province, and also the 30th anniversary of the establishment of Caitong Securities. A series of distinctivecultural activities were organized by the Company to pass on the corporate spirit of "upholding integrity and harmony", showcasing the value ofthe securities industry to society.
The "Caitong Day" on October 24 is a festival for all Caitong people. This year's "Caitong Day" coincided with the 30th anniversary ofCaitong Securities, during which the big family of us reunited sharing the joy of celebrating the anniversary and spending a wonderfultime together. Under the corporate spirit of upholding integrity and harmony in pursuit of dreams, and the family culture of theCompany, all Caitong people were encouraged to enjoy work and life, and speed up with a positive attitude to move forward pursuingtheir dreams of the future.
On the third "Caitong Day", the high-quality development theme event of "Building a Featured Caitong to Propel the Three 'No.1Projects' and the Ten Major Projects" o?cially kicked o?. At the meeting, with the centralized contracting, Caitong Securities reachedstrategic cooperation with more than 10 units (projects) including Zhejiang Natural Resources Group Co., Ltd..
CaseThe Third "Caitong Day"
CaseHigh Quality Development Theme Event for the 30th Anniversary
2023 Environmental, Social and Governance Report
5758
Sound OperationPracticing the Sustainability
Concept
Transformation &
BreakthroughPursuing InnovativeDevelopment Empoweredby Technology Finance
| 01 | 02 |
Common ProsperityCreating a Better Life with
Inclusive Finance
Constant E?ortSupporting the "Dual Carbon"Goal with Green Finance
| 03 | 04 |
Overall PlanningTransforming to the IntelligentFuture with Digital Finance
Adhering to public welfare and charity
The Company has been keen on public welfare, leveraging its business advantages and actively responding to national strategies, with activemeasures to promote rural revitalization and public good, practice the mission of state-owned enterprises, and ful?ll its social responsibilities.Since the launch of public welfare and poverty alleviation work in 2008, the Company has helped 54 villages, 25 townships (towns), and 27counties across the country, bene?ting a total of more than 230,000 people.In 2023, the Companyinvested CNY16.383 million in public welfare throughout the year, including CNY5.723 million forrural revitalization and CNY10.66 million for social welfare
Playing the advantages of group operation, the Company led its subsidiaries to create a series of assistance and public welfare projects, formingthe public welfare brand of "Promoting Philanthropy" to fully help the development of such fields as medical care, culture, and education,with its supporting projects covering 26 provinces. In 2023, the Company engaged in multiple public welfare programs, further expanding thein?uence of its public welfare brand.During the 30th anniversary of the Company's establishment, Caitong Securities fully solicited the opinions of its employees andjointly reviewed the landmark events of high-quality development in the past 30 years; Through centralized selection and candidateannouncement, 30 colleagues with special contributions in the 30 years were awarded to set a model of loyalty and dedication. Theselection activity garnered a warm response and high participation, creating an atmosphere for all to motivate themselves and createvalue.
CaseProgressing with Pride, Collaborating for Tomorrow
In October 2023, the o?cial song of Caitong Securities was released, with a warm, uplifting, and melodious melody, inspiring allCaitong people to pursue their dreams with hard work under the mind and mission of "serving the real economy with financialresources".
CaseSinging the Company Song in Pursuit of a Dream for the Future
Company Song Performance Event
Site of the Activities for the 30th Anniversary of the Company's Establishment
"One Division, One County" Precision Assistance
The year invested 2.3 million yuan to help funds for the modern agricultural industrial park in Gangu County, Yunnan Province,Panan Township, Liujiadun Village, planting base of industrial roads hard, earth back?ll, construction of irrigation canals; JiangeCounty, Sichuan Province, Bailong Township, dragon lanterns, paper dolls, exhibition halls, cultural plaza construction, GongxingTownship, circle of the Dragon Grain and Oil Park in the implementation of the construction of ecological greenway; Jiangxi Province,Yujian County, Daxi Township, NiuPiShan, cultural propaganda wall construction and hardening of the plaza, street lamps andlighting. The construction of the cultural propaganda wall, square hardening and street lighting in Daxi Township, Yugean County,Jiangxi Province; the upgrading and reconstruction of the facade of Hufang Village and the reconstruction of the party members'activity place; the construction of the wild mushroom processing and sales industry chain in Zhongping Township, Luquan County,Yunnan Province; and the improvement of the production and living service facilities of the rural production and living facilities ofthe three groups of Qixingzhuang in Jiaojiaying Community, Chongde Street.
Helping to revitalize the countryside
2023 Environmental, Social and Governance Report
5960
Sound OperationPracticing the Sustainability
Concept
Transformation &
BreakthroughPursuing InnovativeDevelopment Empoweredby Technology Finance
| 01 | 02 |
Common ProsperityCreating a Better Life with
Inclusive Finance
Constant E?ortSupporting the "Dual Carbon"Goal with Green Finance
| 03 | 04 |
Overall PlanningTransforming to the Intelligent
Future with Digital Finance
The Company encourages employees to actively participate in social volunteer services. In 2023, CAI Xinjie was transferred to theAsian Organizing Committee of the 19th Asian Games Hangzhou to participate in volunteer service. During the service, she handled atotal of 869 communication and coordination emails, with a 100% timely response rate, while making zero errors and omissions. Herprofessionalism, work attitude, and expertise were unanimously praised by the customer group, the leadership, and her colleagues.
CaseEmployees of the Company Volunteered to Assist the Asian Games Hangzhou
Our CAI Xinjie represented the team in making English presentations and prepared answers three times successively at the 2nd World
Broadcasters Meeting for the Asian Games Hangzhou and the Hangzhou Asian Para Games Chefs de Mission Seminar
East-West poverty alleviation collaborationAnnual investment in helping funds 500,000, of which CNY 200,000 for Shaping Village, Baima Town, the main road to install solarstreet lamps, to better facilitate the masses to travel at night and create a livable environment; CNY 300,000 for Maduguan Town,Shuangmiao Village, the reconstruction of the village cultural activities room, add cultural room activities facilities to enrich thecultural life of the masses.
Commonwealth Financial Support Training Course
The seventh ?nancial support training course was jointly organized with Zhejiang University at a cost of CNY 300,000 to consolidatethe level of ?nancial knowledge of leading cadres in the support areas, with a total of 110 participants from eight areas.
"Thousands of Enterprises Tie Up Thousands of Villages, Eliminate Weak Villages" ProjectThe company consumed CNY 585,000 to help purchase pomelo and pomelo juice, and the income from the sale of pomelo in "Gongfu Orchard" in Xincun Village, Daqiaotou Township, Changshan County, Quzhou City was close to about 400,000 yuan.
Comfort and help
CNY 150,000 for the Zhejiang Aid Xinjiang Command condolences; Spring Festival eve condolences to help the twinning ofChangshan County, Daqiaotou Township, Mengqiao Village, Sichuan Xuanhan County, Maduguan Township, Shuangmiao Village,and Shaping Village, Baima Township, and so on the three villages of 55 households in need of the people, the condolence fundCNY38,000.
Launching of the "Low-income Farmers' Income Enhancement" project
Contributed CNY 300,000 to help build a tea culture experience base in Leifeng Township, Tiantai County, Taizhou City, to produce apropaganda ?lm for the 15th anniversary of the twinning support, and to organize the "Chinese Farmers' Harvest Festival", a tea andpersimmon culture festival; CNY 50,000 was used to provide special support for the people in di?culty (including condolences in theSpring Festival).
Responding to Chongqing Rural Revitalization InitiativeCooperate with the branch and the local supervision synergy, one to promote rural revitalization help work, CNY 250,000 forDianjiang County, Dashi Township, Shiliang Village, industrial development, infrastructure construction and human settlementsenvironment improvement and other work.Rushing to help the Xinjiang region
CNY 200,000 was donated to the village of Yingtel in Xinjiang for the training of party members and cadres in Yingtel village inKashgar on topics related to the enhancement of rural revitalization capacity.
Promoting community volunteering
2023 Environmental, Social and Governance Report
6162
Sound OperationPracticing the Sustainability
Concept
Transformation &BreakthroughPursuing InnovativeDevelopment Empoweredby Technology Finance
| 01 | 02 |
Common ProsperityCreating a Better Life with
Inclusive Finance
Constant E?ortSupporting the "Dual Carbon"
Goal with Green Finance
| 03 | 04 |
Overall PlanningTransforming to the Intelligent
Future with Digital Finance
Laying out pension ?nance
Against the backdrop of deepening reforms in the capital market and the entry of long-term incremental funds represented by individual pensionfunds into the market, with the o?cial launch of the individual pension scheme, publicly o?ered pension FOF, as a key component of the "ThirdPillar" of pension, may become one of the important choices for individual investors to plan pension investments. In laying out its strategy forthe pension FOF, the Company had strong R&D capabilities as its core competitiveness, with a comprehensive and complementary R&D teamcovering multiple senior experts in the FOF ?eld from public o?ered funds, securities research institutes, insurance asset management, and bankwealth management formed, signi?cant increasing the investment and research strength of the Company.
The Company endeavored to help elderly investors access and use application information online in an equal and convenient manner. Accordingto the needs of elderly investors in accessing information, Caitong Securities upgraded its o?cial website and APP, by optimizing their interfaceinteraction, content reading, operation prompts, voice assistance, and other functions, providing "Care Mode" and "Elderly Mode" for relevantapplications and launching more products with large fonts, large icons and high-contrast texts, to improve the experience of elderly users inusing Internet services, enhance the information accessibility, safeguard the legitimate rights and interests of elderly investors in the informationage, and give them a greater sense of access, happiness and security in the development of information technology.
R&D of pension productsElderly-oriented services
In 2023, the Company's subsidiary made the initial o?ering of its ?rst pension FOF, Caitong SecuritiesAsset Management Kangheng Balanced Pension Three-Year Holding Hybrid Initiated FOF. Comparedwith ordinary equity-biased hybrid funds, FOF funds have a more uniform distribution as to returnsand withdrawals, which can e?ectively reduce non-systematic risks.
The fundrecorded an e?ective subscription of
81.4489 million shares during the o?ering period, of which 61.39%
were subscribed for by fund managers.
"Caixiangtong" (for the elderly) is an official asset management product launched through APP by the Company's subsidiary CaitongSecurities Asset Management. The product supports functions such as account opening, position inquiry, and trading, facilitating theelderly customers to meet their mobile wealth management needs.
The Company's O?cial Website (for the elderly)Elderly-oriented Functions in "Caixiangtong"(for the elderly)
2023 Environmental, Social and Governance Report
6364
Sound OperationPracticing the Sustainability
Concept
Transformation &
BreakthroughPursuing InnovativeDevelopment Empoweredby Technology Finance
| 01 | 02 |
Common ProsperityCreating a Better Life withInclusive Finance
Constant E?ortSupporting the "Dual Carbon"Goal with Green Finance
| 03 | 04 |
Overall PlanningTransforming to the IntelligentFuture with Digital Finance
Constant E?ortSupporting the "Dual Carbon" Goalwith Green Finance
Developing green ?nanceManaging ESG risksImplementing responsible investmentAddressing climate change
Developing green ?nanceThe Company further implemented the requirements of national documents such as theWorking Guidance for Carbon Dioxide Peaking andCarbon Neutrality in Full and Faithful Implementation of the New Development Philosophyand theGuiding Opinions on Promoting Investmentand Financing in Response to ClimateChange, deeply exploiting business opportunities in green energy, energy conservation and emissionreduction, and circular economy, etc. In the ?eld of green ?nance, the Company provides a full chain and all-round ?nancial services, includingequity financing, debt financing, financial advisory, merger, and acquisition, among others, tailoring solutions for customers, with the aimof exploring new paths of green development with customers, and promoting the green transformation and sustainable development of theenterprise. In addition, the Company continued to conduct research on green industries, and strengthen the construction of green researchteams, laying an academic foundation for the development of green ?nance.
In active response to the national green ?nance policy, Caitong Securities was devoted to promoting the development and innovation of thegreen bond market. As one of the leaders in the ?eld of green ?nance, Caitong Securities was not only committed to advocating the conceptof green investment but also focused on taking practical actions. In 2023, the Company assisted in the offering of four green bonds, with acumulative underwriting amount of CNY2.02 billion; and served two IPO projects in the green-related industry.
Taking the listing of industrial silicon as an opportunity, the Company continued e?orts to enhance its layout in the new energy industry chain,using tools such as "futures+spot" and "on-exchange+over-the-counter" to provide one-stop comprehensive financial services for physicalenterprises in this industry. Meanwhile, the Company kept improving its ability to use innovative ?nancial tools such as capital markets andpublicly o?ered REITs, closely combined the use of capital tools with industrial chain investment, and actively explored investment opportunitiesin basic commodity industries, new energy strategic emerging industries, and other industrial chains, making constant contributions to thehealthy development of the green economy.
O?ering green bonds
Supporting green industry
●?
The Company assisted Quzhou City Investment and Development Group Co., Ltd. in accomplishing the non-public offering of greencorporate bonds (Phase 1) in 2023, with a size of CNY970 million, a coupon rate of 3.19%, and a term of 3 years, creating the lowestinterest rate in the history of corporate green bonds with the same rating and term nationwide.
●?
The Company assisted Wenzhou Xingfu Rail Transit Co., Ltd. in making the non-public o?ering of carbon neutral and green corporatebonds (Phase 1) to professional investors in 2023, with a size of CNY500 million, a coupon rate of 3.15%, and a term of 3 years. As the ?rstcarbon-neutral and green corporate bond in Wenzhou, this bond created the lowest interest rate for all types of corporate bonds withthe same rating in China since 2023 and the lowest interest rate in privately o?ered corporate bonds with the same rating and term inthe history of Zhejiang Province.
●?
The Company assisted Jingzhou Development Group Co., Ltd. in the successful o?ering of carbon-neutral and green corporate bonds,having a code of 23 Jingkai G23, with a size of CNY1 billion, a coupon rate of 6%, and a term of 2+2+1, which was the ?rst carbon neutralcorporate bond in Hubei province.
●?
The Company helped Hangzhou West Lake Urban Construction Investment Group Co., Ltd. successfully o?er green corporate bonds(Phase 1) to professional investors in 2023. The bond, with a code of G23 Xicheng 1, had a size of CNY500 million, an interest rate of 3.45%,and a term of 7 years, creating the lowest historical interest rate for corporate bonds of the same term in China.
Supporting non-public o?ering of green bonds
Supporting public o?ering of green bonds
In 2023, the Company
Total green bond position in terms of denomination CNY 800million
2023 Environmental, Social and Governance Report
6768
Sound OperationPracticing the Sustainability
Concept
Transformation &
BreakthroughPursuing InnovativeDevelopment Empoweredby Technology Finance
| 01 | 02 |
Common ProsperityCreating a Better Life withInclusive Finance
Constant EffortSupporting the "Dual Carbon"Goal with Green Finance
| 03 | 04 |
Overall PlanningTransforming to the IntelligentFuture with Digital Finance
The Company conducted in-depth green research, with a view to exploring an effective integration between sustainable development andenvironmental protection and providing investors with accurate and comprehensive green ?nance information and professional advice. Havinga professional green research team with rich industry experience and profound professional knowledge, we regularly released green researchreports, and delved into analysis of the green industry chain, to provide valuable reference opinions for investors.In the ?eld of green research, the Company kept a close eye on research work that covered new energy industries such as photovoltaic, windpower, energy storage, hydrogen energy and third-generation semiconductors, and new energy vehicles, guiding more investors to pay attentionto new energy. Meanwhile, the Company took an active part in the evaluation and tracking of projects in the green industry, maintained closecooperation with industry-leading enterprises, and looked into the industrial development trends, aiming to provide reliable green investmentopportunities for customers. By going into green research, the Company not only made available comprehensive green ?nance informationand professional advice to investors but also contributed to the healthy development of the green industry and the prosperity of a sustainableeconomy. In the future, the Company will continue to devote itself to green research and make greater e?orts to promote the development ofgreen ?nance.
The Company has established a three-level ESG risk management structure that consists of the Board of Directors, the Strategy and ESGCommittee, and the ESG Management Team, clarifying the speci?c responsibilities of each level, with a particular emphasis on identifying ESGopportunities and risks. In addition, the Company's business divisions and subsidiaries have set up an ESG evaluation team, with its memberscoming from the project team, the ?nancial risk control team, and the legal risk control team, to improve the hierarchical control of ESG risksfrom the perspective of system architecture.
The Company strictly implemented ESG risk management at the business level, following the ESG risk management process of identi?cationand evaluation, control and monitoring, and analysis and response, for the sake of full process control of ESG risks exposed to various businessactivities. Meanwhile, further e?orts were made to the evaluation of post-investment management of business to ensure smooth, healthy, andcompliant operation of projects within a controllable range of risks.
Green research
ESG risk management system
ESG risk management process
In 2023, the Company
had a total of 182 green researchteam members
published 3,191 research reports, of which 3,162 were publiclyreleased.
Managing ESG risks
Attaching great importance to the identi?cation, evaluation, and management of ESG risks, the Company recognized the potential impact ofthese factors on its business and investment portfolio, and gradually integrated ESG risks into its comprehensive risk management system,with the Environmental and Social Responsibility Statement of Caitong Securities developed to clearly de?ne the importance of ESG risks andactively incorporate them into the considerations of various business operations.
The Company will collect data and informationthrough internal and external channels tocomprehensively understand potentialESG risks, including making qualitative andquantitative assessments of the impact on thesupply chain, business operations, investmenttargets, and other stakeholders. Industrystandards, ESG rating tools, and professionalconsulting services will be used for theCompany to conduct an in-depth analysis ofidentified risks, and quantify their likelihoodand degree of impact.
In the phase of control and monitoring, theCompany has formulated and implementeda series of measures to reduce, transfer, oreliminate the impact of identified ESG risks,including establishing relevant policies andprocesses, strengthening internal training,and improving awareness. Meanwhile,the Company has established a dedicatedmonitoring mechanism to regularly review andevaluate the changes and evolution of ESGrisks, ensuring the e?ectiveness and timelinessof risk management measures.
In the phase of the analysis and response,the Company will delve into an analysisof established ESG risk events and takeappropriate measures in response, withlessons learned to continuously improve itsrisk management mechanism and handlingstrategies, as well as enhance its ability and?exibility to respond to ESG risks. At the sametime, the Company actively communicatesand cooperates with stakeholders to jointlyaddress ESG risk issues, so as to protectthe long-term interests and sustainabledevelopment of the enterprise.
ESG risk identification and evaluationESG risk control and monitoringESG risk analysis and response
2023 Environmental, Social and Governance Report
6970
Sound OperationPracticing the Sustainability
Concept
Transformation &
BreakthroughPursuing InnovativeDevelopment Empoweredby Technology Finance
| 01 | 02 |
Common ProsperityCreating a Better Life with
Inclusive Finance
Constant EffortSupporting the "Dual Carbon"Goal with Green Finance
| 03 | 04 |
Overall PlanningTransforming to the IntelligentFuture with Digital Finance
ESG due diligence evaluation includes a total of 9 primary indicators, with 26 secondary indicators, in the three major fields ofenvironment, society, and governance. ESG topics encompass:
●?
Environmental Topics (E): Climate change, natural resources, pollution and waste, and development opportunities related to the
environment
●?
Social Topics (S): Human capital, product responsibility, stakeholders, and social impact
●?
Governance Topics (G): Corporate governance
ESG due diligence evaluation dimensions
Energy (including traditional and new energy), basic materials, public utilities, communication services, intelligent manufacturing,information technology, medical and healthcare, fintech, and non-essential consumer goods: for each indicator of E, S, and G, thepoint(s) will be 1 for outperformance, 0 for no di?erence, and -1 for underperformance.
ESG due diligence evaluation - industry weighting reference standards
The Company continued its efforts to improve customer ESG risk management, with a range of management documents such as theDueDiligence ESG Evaluation Formand thePost Investment Management ESG Evaluation Formdeveloped, whereby to identify, analyze, andmanage significant ESG issues that may be exposed to the customers through due diligence. In reviewing investment decisions, focus willespecially be put on projects that violate environmental regulations or involve major environmental litigation, etc. For customers in industrieswith high environmental and social risks such as mining, oil and gas, forestry, agriculture, energy utilization, transportation, and raw materials,the Company will strengthen ESG risk identi?cation, due diligence, and related risk evaluation to prevent ESG risks from being converted intopotential credit risks for Caitong.
ESG due diligence
ESG due diligence evaluation content of Caitong Securities
Implementing responsible investment
The Company always adheres to the concept of sustainable development and is committed to integrating ESG investment philosophy intothe entire process before, during, and after investment. In light of theGreen Investment Guidelines (for Trial Implementation)issued by theAsset Management Association of China and international standards, the Company has formulated and released theResponsible InvestmentStatement of Caitong Securities Co., Ltd., actively incorporating ESG factors into investment evaluation decisions during the management, withits decisions on investment, authorization, and management conducted based on the investment decision-making framework, to promote theimplementation of ESG concepts by invested enterprises through the resource allocation e?ect of the capital market. In 2023, the Companyfurther focused on, identified, and increased investment and financing opportunities in the eight key areas for carbon neutrality, includingelectricity, transportation, industry, new materials, construction, agriculture, negative carbon emissions, and information communication anddigitalization, stepping forward to implement responsible investment under the support of investing and ?nancing policies.
A clear three-level structure consisting of the Strategy and ESG Committee, the Investment Decision Committee, and the ESG Management Teamfor responsible investment management has been established by the Company to fully carry forward ESG and responsible investment activities.Meanwhile, the Company has set up ESG liaison o?cers in relevant departments at headquarters and subsidiaries to analyze ESG issues andcollaborate with third parties for ESG-related training, continuously improving the professional capacity and management of responsibleinvestment. When making investments, ESG factors have been incorporated into the selection of investment targets and the decision-makingprocess of the Investment Decision Committee.
Organizational structure and management of responsible investment
Roles at Di?erent Levels of Responsible InvestmentStrategy and ESG Committee
It serves as the supervisory role of the Company's responsible investment, in charge of comprehensive
supervision over responsible investment mattersInvestment Decision Committee
It serves as the management role of the Company's responsible investment, in charge of responsible
investment decision-makingESG Management Team
It serves as the executive role of the Company's responsible investment, in charge of screening, evaluating
and other work speci?c to the investment targets of responsible investment
Excellent: AAA-AA Average: A-BBB-BB Poor: B-CCC
Note: A project evaluated as having high ESG risks (ESG rating of below B) shall be subject to the review and approval of the CaitongInnovation Review Committee before implementation.
Classi?cation of ESG evaluation results
2023 Environmental, Social and Governance Report
7172
Sound OperationPracticing the Sustainability
Concept
Transformation &
BreakthroughPursuing InnovativeDevelopment Empoweredby Technology Finance
| 01 | 02 |
Common ProsperityCreating a Better Life withInclusive Finance
Constant EffortSupporting the "Dual Carbon"Goal with Green Finance
| 03 | 04 |
Overall PlanningTransforming to the Intelligent
Future with Digital Finance
Investment StrategyStrategy Application
Related AssetCategories
Selecting PositiveCompanies
●?
When choosing the track and establishing a stock pool, the Company fullyconsidered ESG-related factors, screening sectors and companies having superiorESG performance than their peers, with a focus on underlying companies suchas intelligent manufacturing, information technology, medical and healthcare,carbon neutrality, new energy, and other industries that are in line with nationaldevelopment strategies and have a green development philosophy.
●?
The subsidiary Caitong Securities Asset Management actively monitored thedevelopment and new changes in the ?eld of science and technology innovation,and chose the opportunity to make investments; for investment in the traditionalenergy industries such as iron and steel, non-ferrous metals and chemicals, prioritywas given to companies with a high level of environmental management.
●?
As to the subsidiary Caitong Innovation, for intelligent manufacturing, it prioritizedenterprises with high levels of environmental management and intelligence; whilefor medical and healthcare, priority was given to companies that solved practicalproblems of people's livelihood and promoted the development of social healthand hygiene.
Equity Investment,Alternative Investment- Stock OwnershipInvestment
Excluding NegativeCompanies
●?
A negative list of investments was set up by the Company to exclude companies thatdid not generate social bene?ts and were not in line with sustainable developmentroutes.
●?
The subsidiary Caitong Innovation cautiously promoted enterprises withpotential negative social impacts through comprehensive due diligence andthe establishment of ESG negative lists. The subsidiary Caitong Securities AssetManagement fully integrated ESG strategies into practical research analysis andinvestment decisions, guiding researchers to make an overall analysis taking intoaccount ESG factors along with traditional financial indicators to fully evaluateindustry prosperity and individual stock growth, and form strong support forinvestment decisions.
Equity Investment,Alternative Investment
- Stock OwnershipInvestment
Referring to the six principles of the United Nations Principles for Responsible Investment (UNPRI), the Company has developed andimplemented responsible investment strategies including selecting positive companies, excluding negative companies, and integrating ESGfactors, in order to manage ESG risks of investment targets and actively promote the application of various investment strategies in investmentbusiness.
Responsibility investment strategy
Integrating ESG Factors
●?
In the research, analysis, and investment decision-making process, the FixedIncome Department made the comprehensive judgement on whether issuersfulfill their social responsibilities and their performance in environmental andgovernance aspects, which together with traditional ?nancial indicators and otherfactors, were considered in making investment decisions.
●?
The subsidiary Caitong Securities Asset Management fully integrated ESGintegration strategies into practical research analysis and investment decisions,guiding researchers to fully analyze ESG factors together with traditional ?nancialindicators, comprehensively evaluate industry prosperity and individual stockgrowth, and form strong support for investment decisions.
●?
The subsidiary Caitong Innovation included in the investment analysis whether theinvestment target was in line with the national strategic direction, whether therewere significant violations of law, whether there were integrity issues and otherESG-related factors, and assigned a weighting to each ESG factor whereby to derivean overall evaluation score as a reference for investment recommendations.
Fixed IncomeInvestment, AlternativeInvestment - StockOwnership Investment
Active Shareholders
●?
The subsidiary Caitong Securities Asset Management proactively participated in thegovernance of the companies it bid for, such as strengthening contact with listedcompanies through on-site research and voting at Shareholders' Assembly, andpaid attention to the actions and measures of the companies in ESG, so as to makeup for the inadequate disclosure of ESG-related data and information asymmetryof the invested companies, and assist and urge listed companies to implement ESGconcepts.
●?
The subsidiary Caitong Innovation strengthened post-investment management,attached great importance to governance modernization and employee care, andinsisted on transferring ESG concepts to portfolio companies to empower theimprovement of corporate governance.
Alternative Investment- Stock OwnershipInvestment
Sustainability Topics
●?
The Company provided financial support for the green industry by investing ingreen bonds.
●?
ESG strategy products were offered to assist in energy conservation and carbonreduction, with a highlight on green economy industries represented by newenergy vehicles, for sustainable development of enterprises in industries such asphotovoltaic, energy storage, and lithium batteries.
Fixed IncomeInvestment
Impact Investing
●?
Active investments were made in bonds with funds to be used for precise povertyalleviation and new energy.
2023 Environmental, Social and Governance Report
7374
Sound OperationPracticing the Sustainability
Concept
Transformation &BreakthroughPursuing InnovativeDevelopment Empoweredby Technology Finance
| 01 | 02 |
Common ProsperityCreating a Better Life withInclusive Finance
Constant EffortSupporting the "Dual Carbon"
Goal with Green Finance
| 03 | 04 |
Overall PlanningTransforming to the IntelligentFuture with Digital Finance
The Company explicitly required relevant business divisions to include ESG factors in the entire process of the company-wide equity investment,fixed income, and stock ownership investment businesses, and to include three important factors, i.e. environmental responsibility, socialresponsibility, and corporate governance, in the investment decision.
Responsible investment practice
Business CategoryInclusion Method
Equity Investment
Business
●?
When conducting equity investments in listed companies, the Company incorporated ESG factors into investment
decisions, fully utilized ESG evaluation methods, and established a negative list for investments, focusing oninvestment targets with superior ESG performance compared to peers, while excluding investment targets in thenegative ESG investment list.
Fixed IncomeBusiness
●?
In the daily bond investment made by the Company, the issuer's information on ?nance, environment protection,internal governance, and records of illegal activities was summarized, analyzed, and monitored by internal creditrating personnel as one of the prerequisite elements for the inclusion of the target in the pool.
●?
Data sources such as wind were used to conduct ESG scoring, ranking, and rating on targets such as listed
companies with publicly available data; and to conduct internal analysis on targets such as non-listed companieswithout publicly available ESG data after extracting relevant data.
Stock OwnershipInvestment Business
●?
In the due diligence process, the Company incorporated the Customer Environmental, Social, and Governance(ESG) Due Diligence Evaluation Form into the work?ow, and clari?ed the ESG-related due diligence content andevaluation results in the due diligence report of the project.
●?
In the investment decision-making process of stock ownership investment business in alternative investments,projects with high ESG risks after evaluation were subject to the risk review and approval of the InvestmentDecision Committee before implementation.
●?
In the post-investment management process, the content and results of ESG risk evaluation were included inthe post-investment management report every year. If an investment project is elevated to have high ESG risksafter evaluation, it is necessary to conduct a timely risk analysis, adjust the project risk rating, and further assessthe possibility of ESG risks transforming into ?nancial risks and having a signi?cant impact on its performance.Depending on the actual situation, risk mitigation measures should be taken and promptly reported to thebusiness unit leader and Chief Risk O?cer.
In 2023, the subsidiary of the Company, Caitong Innovation, invested CNY30 million in Hangzhou Tianyicheng New Energy TechnologyCo., Ltd., a national high-tech enterprise, and a well-known domestic manufacturer of extraction equipment and anti-corrosion storagetanks specializing in the process design and equipment manufacturing for hydrometallurgy of non-ferrous metals and rare earths, etc.,with a good reputation and in?uence in the industry. The Company is committed to continuously providing more e?cient, advanced,high-quality, intelligent, environmentally friendly, and safe equipment and technology for the environmental protection industry.
CaseGreen Investment - Supporting the Green and Environmental Protection Industry
In 2023, the subsidiary of the Company, Caitong Innovation, made an investment of CNY30 million in ORI OSMO, a high-tech innovativeenterprise engaged in the professional research and large-scale production of high-performance reverse osmosis and nano?ltrationmembrane separation materials, whose products can be widely used in industries such as direct drinking water, food and beverage,medical and pharmaceutical, municipal sewage treatment, seawater desalination, ultra-pure water in the electronics sector, industrialwastewater treatment and reuse, and material concentration and puri?cation.As of the end of the reporting period, Caitong Innovation has invested in 16 green projects on new energy, energy conservation andenvironmental protection, etc., accounting for 28% of the Company's total investment projects, with a total investment amount ofapproximately CNY950 million.
CaseGreen Investment - Supporting Green and High-tech Innovative Enterprises
The Company attaches great importance to promoting andcommunicating responsible investment, strengthening thepromotion of ESG concepts through various means includingspecial training and we-media platforms; inviting third-party professional organizations to systematically review theoverall ESG work of the Company and propose improvementsuggestions based on domestic and foreign rating standards,and in light of the market and the Company's actual situation;actively enhancing cooperation and exchange with externalinvestment and research institutions to keep improving theability of responsible investment; aggregating the powerof the Company, developing green finance, and increasinginvestment in green bonds, new energy and other ?elds, to liftthe Company's in?uence in the green investment area.
Responsible investment promotion and communication
Sites of Responsible Investment Training
2023 Environmental, Social and Governance Report
7576
Sound OperationPracticing the Sustainability
Concept
Transformation &
BreakthroughPursuing InnovativeDevelopment Empoweredby Technology Finance
| 01 | 02 |
Common ProsperityCreating a Better Life with
Inclusive Finance
Constant EffortSupporting the "Dual Carbon"
Goal with Green Finance
| 03 | 04 |
Overall PlanningTransforming to the Intelligent
Future with Digital Finance
Addressing climate change
The Company actively addressed the challenges posed by climate change, identifying climate risks and opportunities related to its operationsbased on the framework recommended by the Task Force on Climate-related Financial Disclosures (TCFD) and taking countermeasuresaccording to the results of the identi?cation to manage the impacts of climate change on it.
Climate-related risk management system
Climate-related risk and opportunity analysisThe Company has established and continuously improved a climate-related risk evaluation and identi?cation mechanism, conducting analysisagainst benchmarking with peers, and proactively identifying climate risks and opportunities related to its operations and business based on theopinions of internal and external experts.
●?
The Board of Directors shall be responsible for monitoring the climate impact brought about by the Company'soperations, and reviewing corporate social responsibility reports including the topic of "addressing climate change"every year;
●?
The Development Strategy and ESG Management Committee of the Board of Directors shall be responsible for guidingthe formulation of climate change-related management goals, reviewing disclosure information on topics pertainingto climate change, and assessing climate change risks;
●?
The ESG Management Team shall be accountable to the Strategy and ESG Management Committee, responsible forthe implementation and promotion of policies on climate change.Governance
●?
Analyze the management process for climate-related risks and opportunities;
●?
Establish climate-related risks and opportunities that are substantial to the Company's business and operations;
●?
Regularly conduct internal research and analysis reports related to climate risks.Strategy
●?
Assess climate-related risks and opportunities based on the Company's own business and strategy, as well as the
TCFD framework;
●?
Build a customer ESG due diligence system, taking into account the climate change factors of customers;
●?
The subsidiary Caitong Innovation has set internal ESG evaluation indicators to assess the carbon emission intensity
in the Company's operations, as well as the practical situation of addressing climate change-related risks and
opportunities, in response to climate change topics.
RiskManagement
●?
Every year, prepare and disclose greenhouse gas emissions, greenhouse gas emissions per unit of area, and otherindicator data in the corporate social responsibility report, and based on this, develop improvement plans to promoteinternal energy conservation and emission reduction work;
●?
Regularly monitor the development of the Company's green ?nance business.
Indicators and
Objectives
Identi?cationEvaluationAnalysisIdentify climate-related risks andopportunities pertaining to thebusiness and operations of CaitongSecurities under the frameworkrecommended by TCFD.
Comprehensively evaluate the impactof climate risks and opportunities onthe operational and financial aspectsof Caitong Securities based on theCompany's business and strategy,combined with expert opinions.
Analyze the impact and probabilityof climate risks and opportunities,to determine the priority of risks andopportunities.
Risk TypeRisk DescriptionPotential Financial ImpactMarket risk
Policies on environmental protection and low-carbon development may bring aboutmacroeconomic structural transformation, and affect market supply and demand structure,having direct or indirect impacts on the Company's finances, or leading to a decrease in thesolvency of customers, thereby increasing credit risks.
Increase in operating costDecrease in operating incomePortfolio value reductionPolicy andlegal risks
In recent years, China has continuously introduced policies, laws, and regulations related toenvironmental protection and green ?nance, in which context, the Company and its customersmay be exposed to risks of breach of contract, punishment, and litigation due to failure totimely identify changes in policies, laws, and regulations.
Damage to reputation and
credibilityDecrease in operating income
Portfolio value reductionMarketopportunities
With the increasingly strong policy support from the government for green finance,improvement of the policy system, and greater interest of the capital market in sustainable?nance, the Company will, if it actively responds to and follows the development trend of thegreen ?nance market, be able to increase its operating income and market in?uence.
Increase in operating incomeIncrease in businesssustainabilityProducts and
services
The Company actively engages in businesses related to green finance, participating in andsupporting the development of commercial society towards a climate-friendly directionthrough o?ering and underwriting green bonds, assisting green and environmental protectionenterprises in listing, and deepening green and environmental protection equity investments.
Increase in operating incomeIncrease in business
sustainabilityInvestment portfolioappreciation
Analysis of climate-related risks and opportunities of Caitong Securities and their potential ?nancial impacts
2023 Environmental, Social and Governance Report
7778
Sound OperationPracticing the Sustainability
Concept
Transformation &BreakthroughPursuing InnovativeDevelopment Empoweredby Technology Finance
| 01 | 02 |
Common ProsperityCreating a Better Life with
Inclusive Finance
Constant EffortSupporting the "Dual Carbon"Goal with Green Finance
| 03 | 04 |
Overall PlanningTransforming to the IntelligentFuture with Digital Finance
Green and low-carbon operationAgainst the backdrop of increasingly prominent global environmental issues and the in-depth implementation of national dual carbonstrategies, green operations have become an important component of sustainable development for enterprises. As an active response to thenational dual carbon background, Caitong Securities placed green operations into its core strategies, in the belief that green development is thefuture theme and the key path for sustainable development of the enterprise. Looking forward, the Company will further deepen the concept ofgreen operation, continuously improve the mechanism and system of green operation, and ful?ll its corporate social responsibility with practicalactions, to help construct a beautiful China.
Green operation measures
In 2023, the Company had
Amount of rainwater recycling andreuse: 2,992 m
Amount of renewable energy usage:
61,891 kWh
●?
The exterior walls of the Hangzhou o?ce building are made of energy-saving and environmentally friendly materials to reduce energy
consumption; the indoor lighting of the building adopts energy-saving LED light sources; and solar photovoltaic panels are installed
on the rooftop to convert solar energy into electricity.
●?
The indoor air conditioning temperature should not be lower than 26 degrees Celsius in summer and not higher than 20 degrees
Celsius in winter. After work, the energy-saving mode should be enabled for public areas.
●?
A water-saving mode is adopted, with water-saving signs posted in public areas.
●?
The o?ce building is equipped with a rainwater recovery system, which collects and treats rainwater for vehicle cleaning and green
plant irrigation.
Energy management
Water resource conservation
●?
All management and business lines of the Company are digitized, for paperless operations through information systems.
●?
O?ce and business promotional materials are subject to strict cost management and usage approval.
●?
Disposable paper cups are not allowed.Paperless operation
●?
Vertiv precision variable frequency air conditioning units are used in the data center, reducing energy consumption through an
intelligent temperature control system.
●?
Cabinet blinders are installed for uncommitted cabinets to reduce overheating and avoid "hot zone" problems in the data center,thereby improving energy utilization e?ciency.
●?
A professional team from China Unicom IDC data center is hired for infrastructure operation and maintenance. Targeted measuresare taken to improve the cooling e?ect of supervision equipment to avoid "leakage" in the data center and reduce reactive powerconsumption.
Energy saving in the data center
●?
Harmless wastes such as o?ce and household wastes are collected and cleaned by the Company's property management uniformly;hazardous wastes such as electronic wastes and toner cartridges are stored at designated locations set up by the Company, andregularly recycled and disposed of by quali?ed companies.
●?
The principle of "3-year warranty and offline after 5 years of operation" is adopted for the important core production systemequipment. Equipment that is functioning and well con?gured after being used for more than ?ve years will be reused for testing andsimulation, etc.; for scrapped or malfunctioning equipment that can no longer be used, the available hard drives, memory, etc. will bereused as spare parts for out-of-warranty equipment repair and capacity expansion.
Waste management
●?
Relevant regulations for the management of official vehicle expenses are formulated, with the usage and expenses publicizedquarterly.
●?
New energy charging piles are installed in the underground garage of the headquarters building.
●?
A business travel platform management system is launched to coordinate the management of daily travel and official businesstravel expenses for employees, encourage employees to use public transportation, and strictly control the reimbursement of travelexpenses.
Advocating for green travel
2023 Environmental, Social and Governance Report
7980
Sound OperationPracticing the Sustainability
Concept
Transformation &
BreakthroughPursuing InnovativeDevelopment Empoweredby Technology Finance
| 01 | 02 |
Common ProsperityCreating a Better Life with
Inclusive Finance
Constant EffortSupporting the "Dual Carbon"
Goal with Green Finance
| 03 | 04 |
Overall PlanningTransforming to the Intelligent
Future with Digital Finance
Overall PlanningTransforming to the Intelligent Futurewith Digital Finance
Creating a Fintech Model with Caitong MethodSafeguarding Information and Privacy Security
Creating a rintech Model with Caltong Method
The Company aims to "build a leading digital-driven securities enterprise", emphasizing top-level design and establishing the planning for"Digital and Intelligent Caitong" from 2023 to 2025. This includes developing a digital transformation "One Account Book" and adhering to the"cross-department, collaboration" principle, focusing on the "1231" digital reform concept and strategically building the "1314N" digital reformtoolbox.
"1": Aiming to build "One Caitong"; "2": Focusing on two main lines of "structural businesses transformation"and "wealth management transformation", "3": Emphasizing serving three types of users, namely customers,employees, and ecological strategic partners; "1": Implementing digital reform for "One Account Book"."1231"
Digital ReformConcept
"1": Building 1 data foundation; "3": Crating 3 customer-oriented products (Caitong APP, Institutional APP, andInstitutional PC tools); "1": Creating 1 employee-oriented product (Zhanzhao); "4": Building 4 service-orientedtools (Yuangongbao, Jiyoubao, "One Network for Supervision", and strategic command system, interpretingbusiness indicators in detail with digital tools to efficiently assist the Company's management in strategicdecision-making); "N": Building N business systems (for subsidiaries and business lines)."1314N"
Digital Toolbox
To improve the top-level design, Caitong Securities invited experts from Zhejiang ProvincialFinancial Supervision Administration, Zhejiang Provincial Big Data Development Administration,Zhejiang Branch of China Securities Regulatory Commission, and Zhejiang University FinancialTechnology Research Institute, etc., to render opinions and suggestions from professional ?elds,industry supervisions, and industry practices, based on their own work content and industrydevelopment trends, to jointly optimize and improve the "Digital and Intelligent Caitong" planningfrom 2023 to 2025 and the "One Account Book" digital reform.The digital reform for "One Account Book" includes 36 key digital projects, of which 5 are aboutcustomer services, 23 professional applications and shared services, 4 digital operations, 3 datafoundations, and 1 infrastructure. Since April 2023, the digital reform of Caitong Securities has beencarried out in an orderly manner based on the principle of "One Account Book", empowering thedevelopment of various businesses.
CasePlanning for "Digital and Intelligent Caitong" from 2023 to 2025 and Implementing Digital Reform for "One Account Book"
1data foundationData collection and governanceExpand the scope of data collection, improve datastandards, data quality, and data security governance,as well as iterate and optimize the data platform anddata warehouse to support the data demands undermore business scenarios
Caitong APP
Institutional APP
Being customer-centric to increase user stickiness andimprove customer experience
Institutional PC toolsImplement transformation for structural businesses tobuild the institutional APP + PC
3customer-oriented products
Big scenarios ofdigital application
Break down barriers among departments and business lines to builda large scenario for the digital application that can be duplicatedand disseminated, under the principle of "cross-department,collaboration, and innovation" and centering on the e?orts for "OneCaitong"
Nbusiness systems
"One Network for
Supervision"
Enhance the capabilities for management and control of specialrisks, including credit risks, market risks, operating risks, anti-moneylaundering, and reputation risks, and improve the e?orts for supervisionand collaboration under application scenarios
Jiyoubao
Enrich and improve the portraits of branches, reshape the appraisalsystem of employees in the wealth business, and integrate theperformance management of the investment bank business
YuangongbaoWhole-life cycle services for employees
Strategiccommand system
Digital tools for detailed interpretation of business indicators, e?cientlyassisting company management in strategic decision-making
4service-oriented tools
Online standardized business development and service system
Build the personal and professional image of employees and realize online customer sharingto stimulate the business potential of wealth consultants and create more sources of income
1platform for employee (Zhanzhao)
8 digital landmark application achievements in the third batch were released by the Digital Reform Promotion Conference, includingYuangongbao, Caitong·Yuexiang, Zhanzhao, One Network for Supervision, E-Finance (券e融), WeMine, Product Manager, and PrivatePlacement Manager, showcasing the Company's digital breakthroughs from continuous exploration and practice by virtue of technology.The 8 application achievements spanned multiple application scenarios, fully demonstrating Caitong Securities' commitment to creatinga digital tool concept that is "e?ective, practical, and user-friendly".
CaseReleasing the Third Batch of Landmark Application Achievements of "Digital and Intelligent Caitong"
The Third Batch of Landmark Application Achievements of "Digital and Intelligent Caitong" Release and Digital Reform Promotion Meeting
2023 Environmental, Social and Governance Report
8384
Sound OperationPracticing the Sustainability
Concept
Transformation &BreakthroughPursuing InnovativeDevelopment Empoweredby Technology Finance
| 01 | 02 |
Common ProsperityCreating a Better Life with
Inclusive Finance
Constant E?ortSupporting the "DualCarbon" Goal with Green
Finance
| 03 | 04 |
Overall PlanningTransforming to the IntelligentFuture with Digital Finance
Safeguarding the Information and Privacy Security
In strict accordance with the requirements of the Data Security Law of the People's Republic of China, the Personal Information ProtectionLaw of the People's Republic of China, and other relevant laws and regulations, the Company endeavored to effectively maintain its datasecurity, guarantee the security of customer information and privacy, and ensure the legal and compliant use of customer information. A three-level management mechanism formed by a Data Governance Committee, an Information Security Management Team, and data governancespecialists from various departments has been established, and multiple internal control systems for privacy and data security protectiondeveloped to fully prevent data security and privacy protection risks. Meanwhile, the Company also actively established cross-industrycooperation, exploring cutting-edge professional technologies for the sake of improving information security.
In 2023, the Company
developed 1 system related to information securityand privacy protection, and revised 3 related systems
Total investment in information technology:
46,847.19
In March 2023, Caitong Securities and Anheng Information officially entered into a strategic cooperation agreement wherebyto establish an all-round and in-depth partnership on securities network security construction in the digital economy era. Bystrengthening top-level design, jointly building laboratories, and regularly conducting phased achievement exchanges, both partiesworked together to assist in the construction of Caitong network and data security, while bringing a new benchmark on networksecurity for securities companies.
CaseEstablishing Strategic Cooperation to Strengthen Information Security Protection
Appendix
Appendix I: ESG Performance Indicators List
IndicatorUnit202120222023Total assetsCNY100 million1,104.251,256.921,337.54Operating incomeCNY100 million64.0848.2765.17Basic earnings per shareCNY/share0.710.340.48
Economic Performance Table
IndicatorUnit202120222023
Number of anti-corruption training for employeessession21012Number of employees participated in anti-corruption trainingperson-time4,50029,00818,226Coverage rate of anti-corruption training%100100100
Governance Performance Table
Disclosure ItemUnit202120222023
Number of types of green bonds o?eredEA104Number of types of green bonds underwrittenEA104Size of green bond o?eringCNY 100 million10029.7绿色债券承销规模CNY 100 million7.5020.2
Green Bonds
2023 Environmental, Social and Governance Report
8586
Sound OperationPracticing the Sustainability
Concept
Transformation &BreakthroughPursuing InnovativeDevelopment Empoweredby Technology Finance
| 01 | 02 |
Common ProsperityCreating a Better Life with
Inclusive Finance
Constant E?ortSupporting the "DualCarbon" Goal with Green
Finance
| 03 | 04 |
Overall PlanningTransforming to the Intelligent
Future with Digital Finance
Disclosure ItemUnit202120222023
Total greenhouse gas emissionston of CO
equivalent3,800.713,712.674,077.15Scope 1 Greenhouse gas emissionston of CO
equivalent130.88143.15121.07Scope 2 Greenhouse gas emissionston of CO
equivalent3,669.833,569.523,956.08Greenhouse gas emissions per capitaton of CO
equivalent/person2.030.980.90Greenhouse gas emissions per unit of areaton of CO
equivalent /m
0.090.110.12
Total natural gas consumptionm
33,021.0044,847.8034,254.00Natural gas consumption per capitam
/person22.5911.807.57Natural gas consumption per unit of aream
/m
0.971.341.02
Gasoline consumption by owned vehiclesL21,934.0020,795.0021,165.00Total electricity consumptionMWh6,057.286,259.026,936.84Electricity consumption per capitaMWh/person3.231.651.53Electricity consumption per unit of areaMWh/m
0.140.190.21
Total water consumptionm
32,552.8230,28828,288Water consumption per capitam
/person17.367.976.26Water consumption per unit of aream
/m
0.750.900.84
Volume of electronic wastepiece206972424Headquarters data center PUE (owned)/1.631.571.55Binjiang disaster recovery data center PUE (owned)/1.451.561.55Headquarters data center energy consumption (owned)MWh3,680.043,941.394,680.61Binjiang disaster recovery data center energy consumption (owned)MWh2,262.352,022.532,322.45
Environmental Performance Table
Note: Scope 1 Greenhouse gas emissions include direct greenhouse gas emissions from the combustion of gasoline and natural gas in own vehicles; Scope 2 Greenhouse gas emissionsare indirect greenhouse gas emissions from purchased electricity. The emission factors for Chinese Mainland in 2020 refer to the 2015 national grid average emission factors in theSupplementary Data Sheet of the 2019 GHG Emission Report issued by the Ministry of Ecology and Environment, and the emission factors for the Hong Kong region refer to thegreenhouse gas emission factors for electricity operating in Hong Kong in HKEx's Appendix II: Reporting Guidance on Environmental Key Performance Indicators, updated on May 28,2021; the emission factors for Chinese Mainland in 2021 are updated to the greenhouse gas grid emission factors for 2021 in the Ministry of Ecology and Environment's Methodologyand Reporting Guidelines for Corporate Greenhouse Gas Emissions for Electricity Generating Facilities (Revised Edition 2022). The emission factors in 2022 refer to the Notice on ProperManagement of Greenhouse Gas Emission Reporting for Enterprises in the Power Generation Sector in 2023-2025.
IndicatorUnit202120222023Employee turnover rate%11.714.212.86By gender
Male%13.716.07.89Female%9.212.24.97By age
>50 years old%8.49.60.3930 to 50 years old%10.912.37.42<30 years old%14.620.85.06By region
Chinese Mainland%11.714.212.64Outside Chinese Mainland (includingHong Kong, Macao, and Taiwan)
%0100.00.22Total number of new employeesperson985880868By gender
Maleperson573496463Femaleperson412382405By age
>50 years oldperson22130 to 50 years oldperson515457423<30 years oldperson468419444By region
Chinese Mainlandperson985876860Outside Chinese Mainland (includingHong Kong, Macao, and Taiwan)
person028
Social Performance TableEmployee Employment Performance Table
Note 1: The statistics are based on the parent company of Caitong Securities.Note 2: Turnover rate for each category of employee = Number of employees in that category lost during the year / Number of employees in that category at the end of the year.
2023 Environmental, Social and Governance Report
8788
IndicatorUnit202120222023Total number of employeesperson3,4643,8015,026By gender
Maleperson1,9092,0732,652Femaleperson1,5551,7282,374By age
>50 years oldperson15419022130 to 50 years oldperson1543,0093,766
<30 years oldperson2,4411,0931,039By region
Chinese Mainlandperson8694,2204,963Outside ChineseMainland (includingHong Kong, Macao,
and Taiwan)
person07263Employmentdiversity
Minorityperson656391Veteranperson12614
Employee Composition Performance Table
Note: The statistics are based on the parent company of Caitong Securities.
Employee Equity Performance Table
Note: The statistics are based on the parent company of Caitong Securities.
Disclosure ItemUnit202120222023
Labor contract signing rate%100100100Social insurance coverage rate%100100100Number of penalties for violating employeeemployment and labor laws and regulations
time000Employee physical examination coverage rate%100100100Number of deaths due to work-related causesperson000
IndicatorUnit2021年2022年2023年
Investment in public welfare and charityCNY10,0002,411.33,588.61,638.3Incl.: Investment in social welfareCNY10,0001,372.31,640.3572.3Incl.: Investment in rural revitalizationCNY10,0001,039.01,948.31,066
Social Contribution Performance Table
Note: The statistics for 2023 are based on Caitong Securities and its invested subsidiaries.
IndicatorUnit2021年2022年2023年
Number of employees trainedperson3,1173,5653,830Employee training coverage rate%89.9893.7995.91By gender
Male%89.9992.6295.80Female%89.9792.6296.00Average training hours per employeehour120.0874.5275.25By gender
Malehour121.5069.3072.95Femalehour118.5077.6477.86Proportion of employees receiving regularperformance and career developmentappraisals
%100.00100100
员工培训绩效表
Note 1: The total employees are based on the parent company of Caitong Securities.Note 2: Training coverage for each category of employees = Number of employees trained in that category / Number of employees in that category.Note 3: Average training hours per employee for each category = Total training hours received by employees in that category / Number of employees in that category. Average traininghours per employee are based on the training hours organized by the Company during the reporting period.
2023 Environmental, Social and Governance Report
8990
Appendix II: GRI Index
Instructionsfor use
Caitong Securities Co., Ltd. prepared its 2023 Environmental, Social and Governance Report (reporting period: January 1,2023 to December 31, 2023) in accordance with the GRI standard report and the information cited in this GRI content index.GRI 1 usedGRI 1: Basic 2021
GRI StandardsDisclosuresLocation
GRI 2: General Disclosures2021
2-1 Organizational detailsReport Pro?le,About Caitong2-2 Entities included in the organization's sustainability reportingReport Pro?le,About Caitong2-3 Reporting period, frequency and contact pointReport Pro?le,About Caitong2-4 Restatements of informationReport Pro?le,About Caitong2-5 External assurance/
2-6 Activities, value chain and other business relationships
Transformation & Breakthrough PursuingInnovative Development Empower byTechnology Finance/Overall PlanningTransforming to the Intelligent Futurewith Digital Finance/Common ProsperityCreating a Better Life with InclusiveFinance2-7 Employees
Protecting the rights and interests ofemployees2-8 Workers who are not employees/2-9 Governance structure and compositionAbout CaitongGRI 2: General Disclosures2021
2-10 Nomination and selection of the highest governance body
Improving corporate governance、2023annual report2-11 Chair of the highest governance body2023 annual report
GRI StandardsDisclosuresLocation
GRI 2: General Disclosures2021
2-12 Role of the highest governance body in overseeing themanagement of impacts
Improving corporate governance2-13 Delegation of responsibility for managing impactsImproving corporate governance2-14 Role of the highest governance body in sustainability reporting
Board Statement, Improving corporate
governance，Improving corporate
governance,Managing ESG risks2-15 Con?icts of interest/2-16 Communication of critical concernsImproving corporate governance2-17 Collective knowledge of the highest governance body
Improving corporate governance,2023
annual report2-18 Evaluation of the performance of the highest governance body
Improving corporate governance、2023
annual report2-19 Remuneration policies2023 annual report2-20 Process to determine remuneration2023 annual report2-21 Annual total compensation ratio2023 annual report2-22 Statement on sustainable development strategy
Board Statement, Improving corporate
governance，Improving corporate
governance2-23 Policy commitments
Investor protection,Managing ESG
Risks,Protecting the rights and interests of
employees2-24 Embedding policy commitmentsImproving corporate governance2-25 Processes to remediate negative impacts/2-26 Mechanisms for seeking advice and raising concernsImproving corporate governance2-27 Compliance with laws and regulations
Improving corporate governance,Investor
protection,Strengthening Risk Control and
Compliance2-28 Membership associations/
2023 Environmental, Social and Governance Report
9192
GRI StandardsDisclosuresLocation
GRI 2: General Disclosures2021
2-29 Approach to stakeholder engagementImproving corporate governance2-30 Collective bargaining agreements
Protecting the rights and interests ofemployeesGRI 3: Material Topics2021
3-1 Process to determine material topics
Improving corporate governance3-2 List of material topics3-3 Management of material topics
GRI 201: EconomicPerformance 2016
201-1 Direct economic value generated and distributed2023 annual report201-2 Financial implications and other risks and opportunities dueto climate change
Addressing climate change201-3 De?ned bene?t plan obligations and other retirement plans2023 annual report201-4 Financial assistance received from government2023 annual reportGRI 202: Market Presence2016
202-1 Ratios of standard entry level wage by gender compared tolocal minimum wage
Protecting the rights and interests of
employees202-2 Proportion of senior management hired from the localcommunity
2023 annual reportGRI 203: IndirectEconomic Impacts 2016
203-1 Infrastructure investments and services supported
Common Prosperity Creating a Better Life
with Inclusive Finance203-2 Signi?cant indirect economic impactsGRI 204: ProcurementPractices 2016
204-1 Proportion of spending on local suppliers/GRI 205: Anti-corruption2016
205-1 Operations assessed for risks related to corruption
Abiding by business ethics
205-2 Communication and training about anti-corruption policies
and procedures
205-3 Con?rmed incidents of corruption and actions takenGRI 206: Anti-competitiveBehavior 2016
206-1 Legal actions for anti-competitive behavior, anti-trust, and
monopoly practicesGRI 207: Tax 2019
207-1 Approach to tax
2023 annual report
207-2 Tax governance, control, and risk management
GRI StandardsDisclosuresLocation
GRI 207: Tax 2019
207-3 Stakeholder engagement and management of concernsrelated to tax
2023 annual report207-4 Country-by-country reportingAbout CaitongGRI 302: Energy 2016
302-1 Energy consumption within the organization
ESG Performance Indicators List302-2 Energy consumption outside of the organizationGRI 302: Energy 2016
302-3 Energy intensity
ESG Performance Indicators List302-4 Reduction of energy consumption302-5 Reductions in energy requirements of products and services
Constant E?ort Supporting the "Dual
Carbon" Goal with Green Finance
GRI 303: Water andE?uents 2018
303-1 Interactions with water as a shared resource
ESG Performance Indicators List303-2 Management of water discharge-related impacts303-3 Water withdrawal303-4 Water discharge303-5 Water consumption
GRI 305: Emissions 2016
305-1 Direct (Scope 1) GHG emissions
ESG Performance Indicators List305-2 Energy indirect (Scope 2) GHG emissions305-3 Other indirect (Scope 3) GHG emissions305-4 GHG emissions intensity305-5 Reduction of GHG emissions305-6 Emissions of ozone-depleting substances (ODS)305-7 Nitrogen oxides (NOx), sulfur oxides (SOx), and othersigni?cant air emissions
GRI 306: Waste 2020
306-1 Waste generation and signi?cant waste-related impacts
ESG Performance Indicators List306-2 Management of signi?cant waste-related impacts306-3 Waste generated306-4 Waste diverted from disposal
2023 Environmental, Social and Governance Report
9394
GRI StandardsDisclosuresLocation
GRI 306: Waste 2020306-5 Waste directed to disposalESG Performance Indicators ListGRI 401: Employment2016
401-1 New employee hires and employee turnoveremployees
Protecting the rights and interests ofemployees401-2 Bene?ts provided to full-time employees that are notprovided to temporary or part-time401-3 Parental leaveGRI 402: Labor/ManagementRelations 2016
402-1 Minimum notice periods regarding operational changes
Protecting the rights and interests ofemployees
GRI 403: OccupationalHealth and Safety 2018
403-1 Occupational health and safety management system
Protecting the rights and interests ofemployees
403-2 Hazard identi?cation, risk assessment, and incidentinvestigation403-3 Occupational health services403-4 Worker participation, consultation, and communication onoccupational health and safety403-5 Worker training on occupational health and safety403-6 Promotion of worker health403-7 Prevention and mitigation of occupational health and safetyimpacts directly linked by business relationships403-8 Workers covered by an occupational health and safetymanagement system403-9 Work-related injuries403-10 Work-related ill healthGRI 404: Training andEducation 2016
404-1 Average hours of training per year per employee
Protecting the rights and interests ofemployees404-2 Programs for upgrading employee skills and transitionassistance programs404-3 Percentage of employees receiving regular performance andcareer development reviewsGRI 405: Diversity andEqual Opportunity 2016
405-1 Diversity of governance bodies and employees
Protecting the rights and interests ofemployees405-2 Ratio of basic salary and remuneration of women to men
GRI StandardsDisclosuresLocation
GRI 406: Non-discrimination 2016
406-1 Incidents of discrimination and corrective actions taken
Protecting the rights and interests ofemployeesGRI 407: Freedomof Association andCollectiveBargaining 2016
407-1 Operations and suppliers in which the right to freedom ofassociation and collective bargaining may be at riskGRI 408: Child Labor 2016
408-1 Operations and suppliers at signi?cant risk for incidents ofchild labor
Protecting the rights and interests ofemployeesGRI 409: Forced orCompulsory Labor 2016
409-1 Operations and suppliers at signi?cant risk for incidents offorced or compulsory labor
/GRI 410: SecurityPractices 2016
410-1 Security personnel trained in human rights policies orprocedures
/GRI 411: Rights ofIndigenous Peoples 2016
411-1 Incidents of violations involving rights of indigenous peoples/GRI 413: LocalCommunities 2016
413-1 Operations with local community engagement, impact
assessments, and development programs
Adhering to public welfare and charity
413-2 Operations with signi?cant actual and potential negative
impacts on local communitiesGRI 415: Public Policy 2016415-1 Political contributionsAdhering to public welfare and charityGRI 416: Customer Healthand Safety 2016
416-1 Assessment of the health and safety impacts of product and
service categories
Improving corporate governance
416-2 Incidents of non-compliance concerning the health and
safety impacts of products and services
Improving corporate governanceGRI 417: Marketing andLabeling 2016
417-1 Requirements for product and service information andlabeling417-2 Incidents of non-compliance concerning product and serviceinformation and labeling417-3 Incidents of non-compliance concerning marketingcommunicationsGRI 418: Customer Privacy2016
418-1 Substantiated complaints concerning breaches of customerprivacy and losses of customer data
Investor protection, Safeguarding
Information and Privacy Security
2023 Environmental, Social and Governance Report
9596
Upholding Integrity and Harmony
In Pursuit of Dreams
Subscription Accountof Caitong Securities
O?cial website: https://www.ctsec.com/Headquarters address: West Building, Caitong Shuangguan Building, No. 198Tianmushan Road, Xihu District, Hangzhou City, Zhejiang
Caitong Securities APPPrinted with environmentfriendly paper