Recently, Capital IFS (CIFS) officially published its 2025 Environmental, Social and Governance (ESG) Report. Prepared in line with the ESG Reporting Guide of the Hong Kong Stock Exchange, the report fully outlines the company’s practices and performance in sustainable governance, green finance innovation, talent development, supply chain responsibility and climate risk management for the period from January 1 to December 31, 2025. It demonstrates the strong commitment of Shougang Group’s financial arm to serving the real economy and advancing China’s goals of carbon peaking and carbon neutrality.

Upholding the philosophy of deepening ESG governance and risk management to build a solid foundation for sustainable growth, CIFS has embedded ESG principles into its corporate governance system, adopting a two-tier decision-making and implementation mechanism: the Board of Directors and the ESG Working Group. The Board oversees ESG strategy, covering risk assessment, target setting and policy delivery. The ESG Working Group, composed of senior executives and functional leads, takes charge of data collection, performance analysis and stakeholder engagement.

Through innovating green finance solutions to drive low-carbon transition across the steel industry chain, CIFS, as a core financial services platform for the Shougang ecosystem, has leveraged its three main businesses, namely financial leasing, supply chain finance and fintech, to launch the “Lv Zu Bao” program. Under the “financial leasing + EMC” model, it provides tailored financing for energy-saving and low-carbon upgrades at steel bases. The company supported Shougang Qian’an Steel’s 100MW power generation project, which recycles low-calorific-value gas for power generation, replaces outdated units, improves heat efficiency and optimizes the energy mix. The project cuts waste of secondary energy, delivers measurable carbon emission reductions and carbon credit gains, and eases clients’ debt burdens via EMC fee-based payment structures.

In 2025, CIFS supplied over 149,700 tonnes of scrap steel to steel bases via factoring services, cutting carbon emissions by 239,500 tonnes. The Shougang Supply Chain Fintech Platform issued a total of RMB15.65 billion in Shougang Jingpiao (commercial drafts), drawing participation from 5,605 suppliers and 8 financial institutions, with operational results meeting all targets.

Focusing on talent development and employee well-being to build an inclusive workplace, CIFS launched programs including the CIFS Distinguished Lecture. It held 72 training sessions on compliance, policies and professional capabilities, achieving 100% employee coverage with an average of 152.76 training hours per person. The company strictly enforced Retail Safety Management Procedures, equipped first-aid facilities and conducted regular fire drills. More than 10 cultural and sports events were held annually, including basketball tournaments and group walks, paired with holiday care and wellness programs, driving steady improvement in employee satisfaction.

Going forward, CIFS will further deepen collaboration with enterprises in the Shougang ecosystem, optimize its ESG governance framework, expand its portfolio of green financial products, and advance full-chain low-carbon transformation across the supply chain. The company will continue to contribute green financial strength to the creation of Shougang scenarios in Chinese-style modernization.