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20 ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT 2020 OUR ESG APPROACH 21

Towngas 2020 Materiality Matrix

Case Study
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In 2020 we launched our ESG Enhancement Plan with the aim of improving our ESG performance and 19 7 10 11 19 9 11
awareness. We also organised the first Group-wide Sustainability Award, which encourages our staff and project 21 20 25 26 13 21 20 35 25 7 10 26
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companies to create innovative, long-term sustainable development projects. Three awards were available: 13 36 32 22 24 15 36 34 32
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22 12 27 33
Environmental Social Sustainability 24 15 34 14 37
Excellence Award Participation Award Award 37 27 33 17
to promote the use of to recognise our joint to acknowledge
advanced technologies in ventures and departmental project continuity 23 3 18 39
waste treatment, as well as efforts to combat the and influence 29 40
continuous waste reduction COVID-19 pandemic through Importance to stakeholders
and recycling innovative measures, social
participation and employee
caring programmes
A series of ESG trainings and publications, as well as other ESG related activities, will be rolled out in 2021.
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Materiality Assessment 28
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To ensure our ESG Report addresses topics that reflect Towngas’ significant economic, environmental and social
impacts, we conduct a series of stakeholder engagement activities every year. 30 5 4
31 6
In preparing our materiality assessment, we adopted the internationally recommended three-step process of Impact of Towngas' business on the economy, environment and society
Identification, Prioritisation and Validation. Less Important Important Very Important

We mapped the materiality of 40 issues, with the most important issues listed at the top right quadrant of the
matrix, while less important issues are found at the bottom left. Issues shown in the middle of the matrix are those Creating Business Opportunities Contributing to Stakeholders
we have identified as emerging in importance. 1 Direct economic value 19 Employment management system
2 Financial risks and opportunities associated with ESG issues 20 Employer-employee relations
A total of 23 issues were prioritised as material for Towngas to address and report on. 3 Direct economic contribution 21 Training and development
4 Indirect economic impacts 22 Diversity, equal opportunity and non-discrimination
The material issues identified remain similar to those of last year, with safety and customer privacy continuing to be 5 Economic impacts of procurement practices 23 Respect for the rights of association and collective
the most important. Additionally, two emerging issues were identified as important: supply security and reliability, 6 Reserves and production bargaining
and a future-proof workforce. This indicated that our stakeholders are concerned with how we guarantee the 24 Responsible marketing communications
supply of goods and services, as well as how we upskill employees and attract new talent with the skills needed 25 Quality management and after-sales service
to capture opportunities arising from emerging technologies, automation and digitalisation. Ensuring Health and Safety 26 Customer privacy and cybersecurity
7 A safe and healthy work environment
8 Asset integrity and process safety 27 Supplier environmental and social assessment
9 Customer health and safety 28 Community engagement, impact assessment and
Identification Prioritisation Validation 10 Project/engineering quality assurance 29 investment
Respect for indigenous rights
• Reviewed and adopted ESG • Results of the survey • The prioritised list 11 Emergency preparedness 30 Involuntary resettlement
issues from previous stakeholder were consolidated, of material issues 31 Participation in public policy
engagement exercises analysed and assessed was presented to Protecting the Environment 32 Future-proof workforce*
to identify a prioritised the Towngas ESG 12 Greenhouse gases and other air emissions 33 Supply security and reliability*
• Emerging ESG issues were also list of potentially material Committee members 13 Water and effluents 34 Accelerated digitalisation*
included issues for discussion and 14 Waste
validation 35 Provision of community crisis support*
• Over 450 external and internal • A materiality matrix 15 Energy
Towngas stakeholders in Hong was then formulated to 16 Materials Strengthening Corporate Governance
Kong and mainland China plot the ratings based 17 Protection of ecosystem services 36 Anti-corruption
completed an online survey to on their importance 18 Fossil fuel substitutes 37 Prevention of anti-competitive practices
confirm or rate the importance of to Towngas and to
ESG topics in relation to Towngas’ stakeholders 38 Prevention of child labour or forced labour
businesses and operations 39 Respect for human rights
40 Protection of intellectual property rights

* Emerging issues