Actively Practicing ESG Concepts and Creating New Value in Financial Leasing - Marking the 16th Anniversary of the Establishment of CMB Financial Leasing

In recent years, with the increasing awareness of environmental protection, the concept of sustainable development has been deeply rooted in the hearts of the people. Focusing on ecological protection, fulfilling social responsibilities, and improving the level of governance coincide with the theme of achieving high-quality development of enterprises.

Since its establishment 16 years ago, CMB Financial Leasing has always been mindful of the "great power of the country", strengthened its mission, and actively practiced the purpose of "creating value for customers" under the guidance of the strategy of "specialization, internationalization and digitalization", adhered to sustainable development, and delivered an excellent answer sheet on the journey of practicing ESG concepts.

Environment: Breathe with lucid waters and lush mountains, and share the fate with ecological civilization

As a pioneer and pathfinder in the field of green finance in China, CMB Financial Leasing takes a long-term view, grasps the development opportunities of green leasing, and continues to build a green leasing brand. As of the end of March 2024, CMB Financial Leasing's green leasing assets exceeded RMB130 billion, accounting for 45% of the Company's total leased assets, achieving sustainable green development.

In terms of aviation, CMB Financial Leasing has helped to save energy and reduce carbon emissions, promoted green flight, actively supported new energy-saving aircraft and engine equipment, and worked with a number of leading customers in the industry to explore sustainable air travel. The company has more than 100 green aircraft, accounting for 55% of the total fleet size, and dozens of energy-saving and emission-reducing green aircraft will be delivered one after another.

In terms of shipping, CMB Financial Leasing has made great efforts to build a green fleet and continue to build a model of green shipping. The company actively studies and judges the new trend of environmental protection technology in the shipping industry, gives priority to supporting energy-saving and environmentally friendly ships as leased objects, and actively assists shipyard technology investment and fleet upgrading in the fields of energy consumption and emission reduction. CMB Financial Leasing has more than 40 green fuel carriers (including those under construction), accounting for nearly 20% of the company's total fleet, and has a variety of green ship types such as LNG fuel and ethane carriers (VLEC).

As the main force in achieving carbon peak and carbon neutrality, green energy has always been the main battlefield for CMB Financial Leasing to promote the green and low-carbon transformation of energy, and related assets account for about 15% of the company's leased asset balance. The company actively cultivates the photovoltaic and wind power industry chains, expands from terminal equipment to upstream modules, and cooperates with many enterprises in the photovoltaic module manufacturing, battery manufacturing, and household photovoltaic EPC industries.

In terms of green transportation, CMB Financial Leasing continued to deploy in the field of "green mobility" under the guidance of cognition, actively developed its business with "self-owned vehicle operating leasing", and launched nearly 10,000 new energy vehicles into the market in total. While integrating into the automobile travel ecosystem, it will spread the concept of green travel in the whole society, lead the new trend of low-carbon life, and drive a simple, moderate, green and low-carbon lifestyle. At the same time, the company focuses on the cascade utilization and recycling of retired power batteries, explores leasing solutions in the field of heavy trucks and online car-hailing, and fully excavates the full life cycle value of power batteries.

In terms of green financing, CMB Financial Leasing has achieved closed-loop management of green leasing business financing with unique ingenuity, and achieved a number of domestic firsts with sustainable green financial products, continuing to lead its peers and creating a new model of green financing. In 2022, CMB Financial Leasing completed the release of the first green report under the sustainable development financing framework, and went through the complete process of overseas green financing from "framework establishment - green financing - post-event report". In 2023, CMB Financial Leasing and Standard Chartered Bank successively launched blue and green dual-theme sustainable synthetic loans, sustainability-linked accounts receivable financing and sustainability-linked loans, and the financing products meet multiple international certification standards, fully demonstrating CMB Financial Leasing's determination and ability to support green project financing.

Society: Serve the development of financial living water and ensure people's livelihood with inclusive and rich soil

Things that benefit the people will be prosperous. CMB Financial Leasing has always adhered to the principle of finance for the people, practiced the concept of people's finance, planted the soil for the development of the enterprise with a high sense of responsibility and mission, nourished the real economy with financial living water, and served rural revitalization with green and inclusive leasing.

In 2022, CMB Financial Leasing proposed the "CMB Financial Leasing Solution" for the distributed photovoltaic power station business through the innovative model of small orders, which was fully affirmed and highly praised by leading customers in the photovoltaic industry. In just a few months, CMB Gold has achieved a cumulative installed capacity of more than 1.6GW of installed capacity in the tenant PV sector, and completed the installation of rooftop PV equipment for more than 50,000 rural households, effectively helping the whole county to promote the strategy of household PV, serving rural revitalization, and practicing inclusive finance. CMB Financial Leasing has become a pioneer in inclusive finance with practical actions, helping to optimize rural farmers' electricity consumption data, peak and valley habits, and precise scheduling, focusing on the development of agriculture, rural areas and rural areas, and serving rural revitalization, so that thousands of villages and thousands of households can bathe in "light" and light up the stars with leasing power.

During the quarantine period in Shanghai, CMB Financial Leasing made every effort to protect the food basket of the citizens, helped supply chain enterprises to further improve their supply capacity, and actively contributed to people's livelihood and supply. CCTV's "News Network" "Fight the Epidemic Together, Warm and Defend Shanghai" column made a special report on the cold chain projects supported by CMB Financial Leasing, which fully demonstrated CMB Financial Leasing's service to people's livelihood and well-being, and its social responsibility to serve the country financially.

CMB Financial Leasing continues to promote the "intelligent" upgrading of equipment in key areas, and cooperates with intelligent manufacturing manufacturers in typical scenarios and subdivisions to provide enterprises with professional equipment procurement solutions. CMB Financial Leasing focuses on the green mining industry and launched the "Mine Without Tears" project, which uses green intelligent unmanned mining trucks as leased items to enable the mining area to operate under black light 24 hours a day, greatly reducing the manpower and fuel costs of mining operations, achieving good results of zero accidents and zero pollutant emissions in safe production, and reducing the overall energy consumption of the project by 38%, becoming a representative practice of new kinetic energy to promote the transformation of production factors to green and safe.

CMB Financial Leasing actively integrates its own development into the torrent of the times, keeps pace with the country's destiny, resonates with policy trends, and actively participates in high-quality Belt and Road cooperation. In the first quarter of 2024, CMB Financial Leasing invested more than RMB2 billion in four countries and regions. Along the "Belt and Road" in China, the projects are spread across 15 provinces and cities, mainly involving aviation, power and other industries, with a total investment amount of nearly 10 billion yuan. In February 2024, a diesel locomotive cargo ship with a total cargo value of over 100 million yuan successfully sailed out of Tianjin in Tianjin, marking the successful landing of CMB Financial Leasing's first RMB cross-border leasing business for locomotive equipment in China, which was reported by CCTV and a number of mainstream media. This is not only another major breakthrough in the cross-border equipment field of CMB Financial Leasing, but also an important attempt in the process of RMB internationalization, demonstrating the deep participation of Chinese financial leasing companies in the construction of the "Belt and Road" and supporting Chinese enterprises to go overseas.

Governance: Turning blueprints into practice and building a comprehensive and sustainable system

Corporate governance is a solid foundation for the high-quality development of enterprises. CMB Financial Leasing has improved its position, maintained integrity and innovation, integrated ESG concepts into corporate governance from a strategic perspective, and established a governance structure that is green-led and low-carbon development. In 2021, CMB Financial Leasing released the "2021-2025 Green Finance Development Plan", which established the development goals of the green leasing business, established and improved the green leasing system, supported the launch of green industries, strengthened green risk management, optimized green financial products, and enhanced green operation capabilities, providing a strong impetus for the practice of social responsibility.

Compliance is the lifeline of corporate development, and CMB Financial Leasing adheres to the principle of "internal control first, compliance-oriented", establishes and improves the compliance system, promotes the concept of compliance, and continues to promote the construction of a compliance culture represented by "compliance first, compliance creates value, and compliance starts from the top", so as to create a good atmosphere.

In terms of digital construction, CMB Financial Leasing made full use of financial technology to efficiently transform digital and intelligent achievements, and a number of self-designed and developed online platforms such as "Anti-Money Laundering Digital System", "Asset and Liability Management System", "Intelligent Audit Platform" and "Smart Operation" came into being, escorting the efficient and stable development of the Company's various businesses with a clear data governance organizational structure, a sound full data management system and a standardized data management mechanism.

In terms of green office, CMB Financial Leasing has taken the initiative to become a practitioner of energy conservation and consumption reduction, and has advocated the conservation of electricity and water, energy conservation and emission reduction, and reduced pollution emissions and resource consumption in the operation process by issuing a green office call. At the same time, the company actively promotes green corporate culture and carries out a series of theme activities such as public welfare tree planting and ESG publicity. CMB Financial Leasing pays attention to continuously strengthening the awareness of social responsibility, fulfilling social responsibility, and making dedication and responsibility. The company actively responds to the call of the state, donates to underdeveloped areas for many years, purchases poverty alleviation commodities, and helps local economic development.

The year 2024 marks the 16th anniversary of the establishment of CMB Financial Leasing. Looking back on the journey, 16 years of spring and autumn fruits, hard work, and striving for the future, CMB people are full of confidence and courageously moving forward. Adhering to the excellent genes of its parent bank, CMB Financial Leasing has been determined to forge ahead and never slack off, achieving steady improvement in quality and reasonable growth in quantity. From green leasing to diversified investment and financing, from practicing inclusive finance to deeply integrating into national policies, from improving the corporate governance system to advocating green corporate culture, CMB Financial Leasing has continuously served green development, implemented the concept of sustainable finance, and promoted low-carbon and environmentally friendly operations, and has achieved fruitful results in the fields of environmental, social and corporate governance.

The journey is strong, and the heavy task is to work hard. Looking to the future, CMB Financial Leasing will continue to implement the new development concept, continue to practice the ESG concept, embrace new quality productivity, deepen the "six new" industrial system, cut through the waves and move forward bravely, create new value of financial leasing, and make greater contributions to China's modernization.