Milestone upgrade of the ESG governance to embed ESG requirements across the full business value chain. SHNE officially launched its inaugural Climate Action White Paper in July 2026, marking that the company’s ESG governance has entered a new stage of specialized climate risk management from foundational framework building. Compiled in strict alignment with the TCFD framework, the white paper systematically outlines the company’s climate action roadmap across four pillars: governance, strategy, risk management, and metrics & targets. In terms of rating performance, SHNE’s Sustainable Fitch Entity Rating rose from 78 in 2025 to 80, maintaining its “Level 2 – Good” assessment; its S&P Global CSA score reached 44, marking its first inclusion in The Sustainability Yearbook; domestic mainstream ratings from Wind, ECPI and SynTao Green Finance both remain at Level A. The company has established a closed-loop governance structure, where climate strategies are subject to final review by the Board of Directors and the Sustainability Committee. Climate risks are integrated into the enterprise-wide risk management system, supported by dedicated incentive schemes to fully embed ESG requirements across the entire business value chain.

Carbon pricing mechanism drives the substantive integration of climate factors into investment decisions. Combining four climate scenarios from the IPCC and NGFS, the company completed a risk assessment covering new energy and heating assets in 29 provinces and cities across China, concluding that the financial impact of physical risks accounts for 0.12%–0.24% of 2025 revenue, with overall risk exposure under control. To mitigate physical risks such as typhoons and floods, the company allocates over RMB 18 million annually to specialized insurance to hedge against financial losses from equipment damage and operational interruption. On the transition risk front, the company closely tracks medium- and long-term headwinds including electricity price marketization and the expansion of the national carbon market, while capturing growth opportunities from green power premiums, green certificate trading and the relaunch of CCER. The core breakthrough of this disclosure lies in the rollout of the internal carbon pricing (ICP) mechanism. Backtesting results show that the mechanism can shorten project payback periods by 0.1–0.2 years, and will be gradually upgraded to a reference metric for investment appraisal.

Positive feedback between green operation and green finance, solidifying financial fundamentals. ESG practices are deeply aligned with operational performance. In 2025, the company’s green power trading volume reached approximately 200 GWh with corresponding revenue of RMB 88.53 million; around 550,000 green certificates were sold, generating over RMB 3.3 million in income. On the financing side, in 2025 the company added RMB 2.487 billion in new green loans and issued three tranches of green medium-term notes totaling RMB 1.5 billion, pushing its comprehensive financing cost down to 3.59% and saving about RMB 200 million in annual financial expenses. On the business front, leveraging shareholder resources, the company has expanded “new energy +” application scenarios such as transportation-energy integration and water plant PV projects, with 12 expressway PV sites and 44 water plant PV projects connected to the grid. Its agrivoltaic and fishery-PV hybrid projects exceed 1.2 GW in total. Meanwhile, it disclosed Scope 3 greenhouse gas emissions covering 7 categories for the first time, totaling 83,100 tonnes of CO₂ equivalent, further improving its emission accounting framework. Social and governance dimensions have also advanced in parallel: in 2025, the company achieved zero work-related fatalities and zero severe injuries for both employees and contractors, with employee turnover dropping to 10.3%; public welfare investment exceeded RMB 15.6 million; industry-university-research cooperation and patent layout continue to deepen. The board of directors has a diversified and compliant structure, with full coverage of anti-corruption and information security training; the internal control and audit system operates independently.

A mature ESG system supports the implementation of long-term strategies. The increasingly sound ESG capabilities will continue to empower the company’s 15th Five-Year Plan development strategy of “boosting wind power, stabilizing PV, deploying energy storage, and expanding hydropower”. Currently, the company holds a 5.8 GW project pipeline, with 3.4 GW of wind power reserves as the core growth driver, and has initiated preliminary exploration of overseas markets along the Belt and Road Initiative. Looking ahead, key ESG priorities including climate resilience building, green asset value enhancement and biodiversity conservation will be deeply integrated with business development, continuously strengthening the company’s green financing advantages and capital market reputation, and supporting its steady progress toward becoming a leading domestic comprehensive clean energy service provider.