Social and Environmental Governance

Operational Safety

In response to the outbreak of the COVID-19 pandemic, the Group promptly adopted comprehensive measures to enhance protection of the health and safety of its employees. These measures include special work arrangement, such as reducing non-essential office work, implementing work-from-home and flexible working hour arrangements, and moving conferences and business meetings online. These not only ensured effective communication of corporate policies, but also reduced crowd gathering significantly. Meanwhile, we developed mobile apps swiftly to strictly monitor employees’ health in all aspects. We also provided necessary protective equipment and hosted online seminars on epidemic prevention for employees. We collected information from staff whose family members were frontline anti-pandemic workers, which were used as the basis for our initiatives relating to staff care. Moreover, catering for the personal needs of its employees and their families, the Group also provided supporting services for their physical and psychological well-being, and expressed love and care to each of its employees through letter of condolences, consolation money, video teleconferences, home visits and other means.

In summer this year, China faced huge pressure on flood control given the exceptionally critical condition of flooding along the Yangtze River. During the flood seasons, Wu Ling Power strengthened its management and control on flooding and established alert mechanism for typhoons, rainstorms and mudslides to closely monitor hazards arising from rainfall, flooding and geological conditions. By taking full advantages of its power system in terms of overall basin organization and dispatch management, it has effectively reduced risks relating to natural disasters and safeguarded the production safety of power plants in the river basins, thus has been effectively fulfilling its social responsibilities and achieving the win-win situation of both flood prevention and power generation at the same time.

During the year under review, the Group continued to improve the conditions for operations in strict compliance with the Production Safety Law of the People’s Republic of China and the Law of the People’s Republic of China on the Prevention and Control of Occupational Diseases and other laws and regulations relating to safety and hygiene. To enhance the production safety management capability of the management personnel, the Company organized training courses for environmental management and quality control officers, and held safety skills contests and other activities. By offering training to the person-in-charge of the safety, production and engineering departments, the chief safety officers and division managers of all units, the Company strengthened safety management and curbed major risks and potential safety threats at an early stage.

The Quality, Occupational Health and Safety, and Environment (QHSE) “three standards” management system established by the Group maintained a stable operation. In order to further enhance its core competitiveness and promote sustainable development, the Group has carried out annual supervision and review, which ensured the compliance with international standards and played an important role in enhancing management level and promoting transformational development.

In 2020, no material accident in the aspects of employees, facilities and environmental protection occurred in the Group.

During the year under review, all operating power plants over which the Group has operational control complied with the relevant PRC production safety regulations. No fines or charges were imposed on the Group due to violation of regulations.

Human Resources

The Group has put great emphasis on the establishment of the performance appraisal, rewarding and punishment mechanism for all employees. It determines the emoluments of its directors and employees based on their respective performance, working experience, duties of the position, and the remuneration system of the Company’s parent companies as well as the prevailing market conditions. The Group has also implemented an incentive policy with performance-linked emoluments.

The Group has also attached importance to the learning and training of employees and to the communication between employees of different positions. It has improved the professional and technical capabilities and overall competence of its employees on an on-going basis, so as to satisfy the needs of its expanding businesses.

As at 31 December 2020, the Group had a total of 10,520 (2019: 10,444) full-time employees.

During the year under review, all business units over which the Group has operational control complied with the local labor laws. No fines or charges were imposed on the Group due to violation of regulations.

Energy Saving

The Group has always been placing a great emphasis on environmental protection from the perspective of sustainable corporate development, vigorously promoting energy saving and emission reduction, conscientiously fulfilling its social responsibilities and actively responding to global climate change.

In 2020, the net coal consumption rate of the Group was 303.31g/kWh, representing a slight increase of 1.49g/kWh as compared with the previous year. The net coal consumption rate remained at a relatively low level. The electricity sales of coal-fired power in 2020 decreased by 2.23% and the output efficiency of coal-fired power generating units decreased, resulting in a slight increase in net coal consumption rate, which was mainly attributable to the impact of the COVID-19 pandemic early last year and the increase in the consumption of clean energy.

Emission Reduction

In active response to the policy of “Action Plan of the Upgrade and Renovation of Energy Saving and Emission Reduction of Coal-fired Units (2014–2020) (煤電節能減排升級與改造 行動計劃(2014–2020年))” and the “Implementation Plan on Setting and Distribution of National Aggregate Carbon Emission Rights Trading Quota 2019-2020 (Power Generation Industry)” (2019-2020年全國碳排放權交易配額總量設定與分配實施方案(發電行業)) promulgated by the PRC government, the Group has strengthened the environmental control and rectification measures for its coal-fired power generating units. Currently, more than 90% of the operating coal-fired power generating units have met the standards of ultra-low-emission.

In 2020, the operational ratio of desulphurization facilities for the coal-fired power generating units of the Group was 100% (2019: 100%), and the efficiency ratio of desulphurization reached 99.23% (2019: 99.30%); while the operational ratio of denitration facilities was 100% (2019: 100%) and the efficiency ratio of denitration reached 88.39% (2019: 89.85%).

During the year under review, the environmental protection indicators for coal-fired power generating units were as follows:

Three environmental protection indicators recorded an increase as compared with the previous year, which was mainly attributable to the higher average emission rate resulting from the year-on-year growth of power generation of two 660MW generating units that have not yet met the ultra-low emission standard. The Group has carried out technological research on the ultra-low emission upgrade for these two generating units and launched the optimization projects for all generating units in order to improve the production efficiency. The ultra-low emission upgrade project is at the feasibility study stage. Although the Group’s emission rates of sulfur dioxide, nitrogen oxide and flue gas and dusts have all increased, but were still significantly lower than the permitted level of national pollution emission.

While stepping up its efforts in the protection of ecological environment, the Group continued to push forward the investigation and management of ecological and environmental issues in an orderly manner. During the year under review, it commenced the research on generic technical problems of complex environmental issues and completed the study on the treatment of problems arising from ultra-low emission. The enclosed renovation of the coal mines in Yaomeng Power Plant was completed. The technical upgrade projects of replacing liquid ammonia with urea as denitration reducing agents were also accomplished in Wuhu Power Plant and Fuxi Power Plant. The technical upgrade project of CP Shentou is underway as planned.

During the year under review, all the power plants over which the Group has operational control complied with the relevant PRC environmental protection regulations. No fines or charges were imposed on the Group due to violation of regulations.

Relationships with Customers and Suppliers

We regard customers and suppliers as very important stakeholders. The Group has been maintaining good communication, building a trusting and effective cooperative relationship and establishing contact with them through various platforms. During the year under review, the Group continued to improve communication with customers and suppliers so that we can understand their expectations more comprehensively and achieve sustainability goals with concerted efforts. For the year ended 31 December 2020, there were no significant disputes with customers and suppliers.

In 2020, the COVID-19 pandemic continued to spread across the world. The Company demonstrated its understanding of the prevailing difficulties to its customers and suppliers through various means. Apart from pursuing profitability, the Company also cares about and undertakes social responsibility by showing empathy to customers and suppliers. In response to government’s measures, the Company made necessary adjustments and took the initiative to notify customers and suppliers, so that they could make corresponding adjustments as early as possible. This not only protected their interests, but also helped to maintain our ongoing relationship with them for win-win outcomes.

Relationship with customers

The Group is an independent power producer. Because of the special nature of electricity production and sales, its major customers are regional and provincial power grid companies, through which it sells the electricity generated by its power plants to power users and settles the transactions. The Group has been maintaining long-term and good customer relationships with the power grid companies in various locations where its power plants locate. During the year under review, the aggregate turnover attributable to the Group’s five largest customers (regional power grid companies) accounted for 71.71% of the Group’s total turnover.

The pace of market-oriented reform in the power industry has continued to accelerate in 2020. Adhering to the principle of customer-centered and leveraging opportunities brought by the reform, the Group has established direct connections with power users to develop and provide value-added services. At the same time, the Group has actively participated in market-oriented direct electricity transactions, established and invested in electricity sales and distribution companies and electricity trading centers, and developed integrated intelligent energy and other projects.

Relationship with suppliers

The Group’s major suppliers are coal production and sales enterprises, while its coal-fired power plants purchase the majority of coal from neighboring coal production enterprises primarily under long-term contracts. The Group has been maintaining long-term and good relationships with major suppliers in order to ensure efficient coal procurement. During the year under review, the aggregate purchases from the Group’s five largest suppliers (for production materials like coal and consumables) accounted for approximately 52.53% of the Group’s total purchases. The Group will continue to explore different procurement channels to ensure the stability of coal supply.

The Group strives to establish fair, just and stable mid-to-long-term cooperation with suppliers, strictly fulfills the contractual agreements, respects and treats each supplier equally. It has formulated a stringent and standardized supplier selection and management system, established a supplier review team and conducted strict reviews according to the integrity, quality assurance, punctuality of supply, price reasonableness, etc., so as to select more competent and reputable suppliers to jointly maintain a healthy and orderly market environment. In recent years, the Group has given full play to its scale advantages of centralized procurement with the production equipment and other relevant materials procured centrally by a subsidiary, which will help to establish a stable supply chain.

The Group also incorporates concepts and requirements of social responsibilities in supplier management, and clearly stipulates that materials must meet the relevant national environmental protection laws and standards while signing purchase contracts, in order to prevent pollutants from exceeding the emission standards at source.