Environmental,Social and Governance Report 2019
Luen Mei Quantum Co., Ltd.
PREFACE
We provide people with warmth, but we always believe that we can do more.
Warmth, while invisible, can be seen on our smile faces; while intangible, can be
valued when we enjoy fresh air, blue sky as well as beautiful mountains and clean
rivers.
Green, the background color of nature, symbolizes vitality as well as our
yearning for a better and harmonious life.
Green development is a long-term view of development, a universal value, and
the responsibility for everyone living on our planet.
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Contents
PREFACE ............................................................................................................................................... 1
CHAIRMAN’S MESSAGE ................................................................................................................... 3
ABOUT LUEN MEI ............................................................................................................................... 6
COMPANY PROFILE................................................................................................................................ 6
COMPANY MILESTONES ........................................................................................................................ 7
AWARDS AND RECOGNITIONS ............................................................................................................... 8
RESPONSIBILITY MANAGEMENT ................................................................................................. 9
ESG MANAGEMENT SYSTEM ................................................................................................................ 9
MATERIALITY ISSUES .......................................................................................................................... 10
STAKEHOLDER ENGAGEMENT ............................................................................................................. 11
1. CREATING SUSTAINABLE VALUES ..................................................................................... 12
1.1 OPTIMIZING CORPORATE GOVERNANCE ........................................................................................ 13
1.2 ENSURING INTEGRITY AND COMPLIANCE ...................................................................................... 16
1.3 STRINGENT SAFETY MANAGEMENT .............................................................................................. 18
1.4 PRACTICING RESPONSIBLE PROCUREMENT ................................................................................... 23
2. RESPONSIBLE SERVICE FOR CUSTOMERS ...................................................................... 25
2.1 ENSURING STABLE HEATING SUPPLY ............................................................................................ 26
2.2 STRENGTHENING RESEARCH AND INNOVATION ............................................................................. 28
2.3 IMPROVING CUSTOMER SERVICE SYSTEM ..................................................................................... 29
3. GREEN AND ENVIRONMENTALLY FRIENDLY DEVELOPMENT ................................. 32
3.1 IMPROVING ENVIRONMENTAL MANAGEMENT SYSTEM ................................................................. 33
3.2 RESPONDING TO CLIMATE CHANGE ACTIVELY .............................................................................. 37
3.3 PROMOTING RATIONAL UTILIZATION OF RESOURCES .................................................................... 39
4. GIVING BACK TO SOCIETY AND CREATING A BETTER FUTURE TOGETHER ...... 40
4.1 WIN-WIN COOPERATION WITH THE INDUSTRY ............................................................................... 41
4.2 GROWING TOGETHER WITH EMPLOYEES ....................................................................................... 42
4.3 CONTRIBUTING TO A HARMONIOUS SOCIETY ................................................................................ 51
5. FEATURE: LIGHTING UP HIGH-SPEED TRAIN TRAVELS WITH DIGITAL MEDIA . 53
5.1 PROMOTING EFFICIENT COMMUNICATION ..................................................................................... 54
5.2 RAISING PUBLIC AWARENESS TO SUPPORT PUBLIC WELFARE ....................................................... 55
ESG RELATED POLICIES ................................................................................................................ 57
GRI STANDARDS INDEX .................................................................................................................. 58
ABOUT THIS REPORT ...................................................................................................................... 59
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CHAIRMAN’S MESSAGE
Dear Stakeholders,
It is a great honor to present you the first Environmental, Social and Governance
Report of Luen Mei Holding.
As a company specializing in clean thermal energy, for more than a decade, Luen Mei
Holding has been committed to providing safe and reliable heating services to our
customers by consistently following the sustainable development concept of “green,
low-carbon, safety and responsibility”. We focus on improving the quality of life as
well as the living environment of people, and pursue economic returns, social values
and environmental benefits in a harmonious way. To date, we have already become
the largest clean thermal energy company listed in China’s capital market.
2019 marks the 70th anniversary of the founding of the People’s Republic of China,
as well as a crucial year for China to build a moderately prosperous society in an all-
round way. During the year, we continued our pursuit for high-quality and sustainable
development in accordance with the new development concept, and have achieved
significant progresses in many aspects.
Pursuing steady progress on a solid foundation, and exploring the nationwide
market. With a home base in Shenyang, we have been growing our businesses
nationwide steadily. Our heating area keeps growing, and our economic performance
as well as profitability keep improving. With our abundant cash flow and healthy
financial conditions, we has become an industry leader in terms of comprehensive
competitiveness. Insisting on “comprehensive development with multi-energy and
multi-purpose”, the Company has expanded its business scope to provide
comprehensive energy services such as heating, steam, electricity and cooling, using a
variety of energy sources, such as clean coal technology, reclaimed water, biomass
energy, natural gas, and residual heat and waste heat, etc. We have achieved
leadership in a number of energy related fields, such as the combined heat and power
generation in northern cities, combined cooling, heating and electricity supply in
southern cities, and the supply of industrial steam.
Strengthening governance and ensuring stable operation and compliance. We
have been making continuous efforts to modernize our governance mechanism and
capabilities, and optimize our governance structure to strengthen the governance
performance. We also communicated with investors through multiple channels to
understand and address their needs more effectively. We attach great importance to
compliance and business integrity, and implements a “no exception, full coverage, and
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zero tolerance” policy towards corruption to root out corruption hazards and build a
solid foundation for the rapid and healthy development of our businesses.
Pursuing green and low-carbon development, and protecting the environment
for a green planet. We strictly abide by the low-carbon and environmentally friendly
development concept, and actively address the opportunities and challenges brought
about by climate change. We integrate environmental protection efforts into operation,
and actively promote the transition to clean energy. With the continuous efforts to
reduce our comprehensive energy consumption during production and distribution
processes, strengthen GHGs and pollutant emissions management, intensify energy
conservation and emission reduction measures, and promote more efficient utilization
of water, waste and other resources, we have achieved remarkable results and reduced
our environmental footprint.
Focusing on safety and quality, and building a strong brand. Adhering to the
principle of “safety is not only a responsibility but also the bottom line” and the
principle of “people-oriented, safe development, safety first, prevention first and
comprehensive management”, the Company has developed a comprehensive safety
management system. We have also implemented occupational disease protection
measures and provided occupational health examinations for employees with
exposure to occupational hazards. We continued our efforts to strengthen our
information platform. Our intelligent risk control system and quick, efficient customer
response mechanism allow us to provide timely, safe and reliable energy consumption
services to customers. Upholding the heating needs of 650,000 households and
2,000,000 residents, we continue to improve the service experience and service
quality for our customers through technological research and innovation, and service
system optimization.
Insisting on technological innovation and refined management, and leading
industry development. Over the years, we have been powering our development
with technological innovation, including exploring new energy technologies,
investing in research and development, and organizing coordinated research on key
technologies. Our efforts have led to a series of breakthroughs of key research
projects. As a rare high-tech enterprise in the heating industry and a provincial post-
doctoral innovation practice base, we have developed a number of patented
technologies in the field of heating. Our growing reserve of innovation outcomes and
self-developed intellectual properties give us great advantage to support our business
growth and enhance our core competitiveness.
Fulfilling corporate social responsibilities and contributing to a harmonious
society. Besides creating economic values, we are committed to giving back to
communities and supporting local economic development. We maintain close
communication with communities where we operate, continuously carry out
cooperation and exchange with industry peers, universities and research institutions,
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and protect the rights and interests of employees, and encourage employee career
development with sound career path planning. Adhering to the concept of open
communication, we organize Open Day events regularly to provide a platform
allowing community members to better understand us. We also actively encourage
employees to give back to community, such as supporting public welfare,
volunteering, and helping disadvantaged groups.
In the high-speed rail media business segment, Mega-info Media, a subsidiary of the
Company, is committed to pursuing win-win results for both the travelers and the
advertisers by increasing the efficiency of dissemination of information with upgraded
media resources and optimized site quality. Mega-info Media also explores new ways
to raise the awareness of public welfare by donating advertising time for public
service advertisements, making positive contribution to helping the public welfare
causes reach more people.
Looking forward to the future, we will continue to improve our corporate governance,
enhance our governance capabilities, promote structural upgrading, strengthen the
foundation of industrial development and comprehensively implement the concept of
high-quality and sustainable development focusing on “green, low-carbon, safety and
responsibility” with the purpose to provide more and better clean energy services for
society and the people. With our core competence in green development and energy
technologies, Luen Mai Holding is committed to creating long-term value for our
shareholders, customers, employees and society, and making continuous efforts to
protect the environment.
Su Zhuangqiang
August 2020
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ABOUT LUEN MEI
Company Profile
Luen Mei Quantum Co., Ltd. (hereinafter referred to as “Luen Mei Holding”, “the
Company” or “we”) (600167. SH) is currently the largest listed clean thermal energy
company in the A-share market, with business scope covering heating, power supply,
engineering and networking, and advertising. Driven by technological innovation, the
Company has been paying close attention to customer needs and market trends,
actively adjusting business strategy, operation and management models accordingly,
and leveraging its new energy technologies to provide reliable products and services
trusted by customers for society. With its continuous technological innovation, quality
customer service, green operation, nimble management system and trailblazer spirit,
Luen Mei Holding has achieved outstanding performance and become an influential
brand in the public utilities sector.
In 2019, focusing on integrated energy services for industrial parks and urban heating,
we continued our pursuit to green and sustainable development and leveraged our
expertise to provide better services for both residential and industrial customers.
Meanwhile, as China’s high-speed railway system growing from the “four horizontal
and four vertical” layout to the “eight horizontal and eight vertical” layout, the digital
media network of the Company is able to entertain travelers with more interesting
content and create high-quality and impactful communication result for advertisers.
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Company Milestones
Date Event
After completing the equity transfer with Nanhu Technology Group, Luen
Mei Group became the largest shareholder of Shenyang Xinkai
Apr 2005
(600167.SH), which had changed its ownership from state-owned holding
to private holding.
Shenyang Xinkai (600167.SH) invested and founded Shenyang Hunnan
Jun 2006
Heat-supplying Co., Ltd.
Feb 2008 Shenyang Xinkai (600167.SH) was changed to Luen Mei Holding Co., Ltd.
Stock abbreviation of Luen Mei Holding Co., Ltd. was changed to Luen
Mar 2008
Mei Holding (600167.SH)
The No.3 Thermal Plant of Hunnan Heat-supplying Co., Ltd., a subsidiary
Sep 2012
of Luen Mei Holding (600167. SH), started construction.
Luen Mei Holding (600167. SH) completed a major asset restructuring,
adding seven subsidiaries, including Shenyang Xinbei Thermoelectric Co.,
Ltd., Guohui New Eco-energy Co., Ltd. and their subsidiaries, which both
May 2016
increased its business scale and added environmentally friendly businesses
such as clean coal technology, biomass-based cogeneration and intelligent
monitoring to its business scope.
Luen Mei Holding Co., Ltd. changed its business registration to Luen Mei
Nov 2016 Quantum Holding Co., Ltd., stilled referred to as Luen Mei Holding
(600167.SH).
Luen Mei Holding (600167. SH) completed an organizational restructuring
Apr 2017
to achieve nimble management.
Shenyang Guoxin New Eco-energy Co., Ltd,, a subsidiary of Luen Mei
Holding (600167. SH), acquired Shenyang Huanggu Heat-supplying Co.,
Aug 2017
Ltd, with the plan to replace its traditional heating model with the
centralized heating model.
Luen Mei Holding (600167. SH) acquired Mega-info Media, the largest
high-speed railway media digital operator in China, forming a twin main
Nov 2018
business model of clean thermal energy and high-speed railway digital
media.
Luen Mei Holding (600167. SH) acquired of Heze Fulin Thermal Power
Mar 2019
Technology Co., Ltd.
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Awards and Recognitions
Date Awards and Recognitions Issuers
Luen Mei Holding
2018 Award for Investor Relations
2019.10 China Securities Journal
Management
2018 Golden Bull Award for Board
2019.10 China Securities Journal
Secretary
Top 100 Listed Companies in Value in the
2019.08 Securities Times
Chinese Main-Board Market
2017 Top 100 Listed Companies in Value
2018.06 China Development Press
by CNISP Group, ranked No. l8
2017.11 Yearly Award for Investor Relations Quanjing.com
Shenyang Hunnan Heat-supplying Co., Ltd.
Shenyang Heating Industry
2018.07 AAA-rated (credit rating) heating supplier
Association
Central Communist Youth
2016 National Safety Production
2017.04 League and the National
Demonstration Post for Youth
Security Administration
Guorun Low-carbon Thermal Power Co., Ltd.
Shenyang Heating Industry
2018.7 AAA-rated (credit rating) heating supplier
Association
Guohui New Eco-energy Co., Ltd.
Shenyang Heating Industry
2018.07 AAA-rated (credit rating) heating supplier
Association
Shenyang Xinbei Thermoelectric Co., Ltd.
Shenyang Heating Industry
2018.07 AAA-rated (credit rating) heating supplier
Association
TOP100 energy-saving and
China Energy Conservation
2016.09 environmental-friendly enterprise in the
Association
thermoelectric industry
Mega-info Media
Award for Advertising Owner Award for China International
2019.10
Golden Partner Advertising Festival
2019 CRE International
2019.08 Gold Award for Marketing Innovations
Innovation Festival
2018 award for innovative marketing
China Innovation Marketing
2018.12 within the industry - the Bronze Award for
Summit
Transportation and Travel
2018 Grand Ceremony of
2018.09 Yearly Golden Partner
Advertising Owners
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RESPONSIBILITY MANAGEMENT
Luen Mei Holding actively advocates the concept of social responsibility and strives
to integrate the consideration for economic, social and environmental factors into its
operation and management. It provides clean, reliable and affordable heating services
for customers and create value for shareholders, customers, employees, communities
and the environment in an honest, responsible and sustainable way.
ESG Management System
The Company has integrated environmental, social and corporate governance into its
own development strategy and business activities, and established an ESG
management system to transform sustainability concepts and commitments into
actions.
Members of the Board of Directors and the Board of Supervisors
Decision-making participate in the deliberation and decision-making regarding major ESG
level issues, including formulating strategies and guidelines and reviewing the
annual ESG report of the Company.
The CEO’s Office is in charge of ESG management and coordinates ESG
Organization
related affairs, including collecting ESG performance data, preparing
level
ESG report, and communicating with ESG investors.
The functional and operational departments at the headquarters and
subsidiaries are responsible for the centralized management of various
Implementation
ESG issues and the implementation of key ESG practices, and the regular
level
reporting on relevant management approaches, performance indicators
and best practices.
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Materiality Issues
In accordance with the principles of materiality, completeness and balance, and by
responding to the demands of stakeholders and referring to the requirements of the
GRI Standards, Luen Mei Holding has systematically evaluated its impacts on
stakeholders and identified the following material sustainability issues.
Dimension Material Issue
Optimizing governance Business Ethics (P16-P17) Comprehensive risk
structure (P13-P14) management (P16-P22)
Governance Integrity and anti-
Compliance management corruption (P16-P17) ESG management (P9-
(P16-P17) P11)
Environmental risk Clean energy technological GHGs emission
management (P33-P36) innovation (P33-P39) management (P37-P38)
Environmental
Water resources Waste management (P39) Air pollution control (P33-
management (P39) P39)
Workplace safety (P21- Fair and transparent Localization and
P22) procurement (P23-P24) diversification (P42-P43)
Reliable heating service Transparent and lawful tax Employee career
(P26-P27) payment (P17) development (P44-P46)
Quality of service (P29- Supporting social welfare Research and innovation
Social
P31) (P51-P52) (P28-P31)
Protecting employee rights Occupational health and Promoting community
(P42-P43) safety (P21-P22) development (P51-P52)
Supplier/contractor
management (P23-P24)
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Stakeholder Engagement
Stakeholder Expectation Communication mechanism
Government communication
Provide reliable heating service
conference
Driving local community
Government Regulatory information exchange
development
and Regulators Information disclosure and
Integrity and compliance
reporting
Lawful tax payment
Regular visits
Regular reporting and
Steady performance
announcement
improvement
Investor research
Shareholders Integrity and compliance
Shareholder meeting
Sound corporate governance
Communication on interactive
Create outstanding performance
platform
Protection of employees’ rights Employee representative meeting
and interests Employee satisfaction survey
Workplace health and safety Employee training
Employees
Training and career Employee complaint mailbox
development
Employee sports and health
Pay and benefits growth activities
Reliable heating service Commitment on quality of service
Improve service quality Customer room temperature
Customers Integrity and compliance measurement
Protect customers’ rights and Service hotline
interests Customer satisfaction survey
Bidding meeting
Fair and transparent Contract negotiation and regular
Business
procurement meeting
partners
Win-win cooperation Onsite inspection
Supplier evaluation
Job creation
Open Day event
Environmental protection
Community visits and dialogues
Community Driving local community
Employee volunteering activities
development
Knowledge sharing and education
Supporting public welfare
Carbon emissions management Energy conservation and emission
Pollution control reduction
Environment Resource recycle and reuse Environmental impact assessment
Ecological environment Environmental reporting
protection Environmental awareness raising
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1. CREATING SUSTAINABLE
VALUES
Sustainability Context
With a business that is highly related to people’s
livelihood, Luen Mei Holding fully understands
that creating long-term value for shareholders,
society and other stakeholders is essential to
building a solid foundation for its stable
development. The Company strictly abides by
laws and regulations, continuously optimizes
corporate governance, raises awareness of
compliance and integrity among employees,
effectively manages risks, and strives to guide its
sustainable growth with high standards of
governance, and lays a solid foundation for the
sustainable development of the Company.
1.1 Optimizing Corporate Governance
The Company strictly abides by The Company Law of the People’s Republic of China,
The Securities Law of the People’s Republic of China, and other relevant laws and
regulation, and is committed to establishing a rigorous, scientific and sound
governance structure, so as to provide the organizational and institutional guarantees
for business decision-making, and support the stable and long-term development of
the Company.
Optimizing Governance Structure
As of the end of 2019, the Board of Directors has seven directors, including four non-
independent directors and three independent directors. The Board of Supervisors has
three members. The Company continuously standardizes the operation and
management of the Board of Directors. With a Strategic Development Committee, a
Remuneration and Assessment Committee, a Nomination Committee and an Audit
Committee, the Board of Directors plays an effective role in the supervision, check
and balance and decision-making of corporate affairs.
Shareholder
Board of Directors Board of Supervisors
Strategic Renumeration
Nomination Audit
Development and Assessment
Committee Committee
Committee Committee
Management
HQ Departments Subsidiaries
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Improving Corporate Governance
The Company maintains close communication with the China Securities Regulatory
Commission, Shanghai Stock Exchange and other regulatory authorities, closely
follows policy updates and analyzes policy trends, actively participates in trainings
organized by regulatory authorities, and regularly adjusts its policies and regulations
in accordance with the changes in regulatory policies and in internal and external
environments of the Company.
In 2019, the Company revised the Articles of Association and the Proposal on the
Provisions of the Working Rules of the Audit Committee of the Board of Directors,
reviewed and passed a number of policies, including The External Guarantee
Management System, The Affiliated Transaction Management System and The
Material Information Internal Reporting System, and conducted information
disclosure strictly in accordance with regulatory requirements, having released a
series of reports and policies, including Performance Commitment Form, Equity
Pledge Status Form, Investor Protection Report, Listed Company Development
Report, Capital Serving Real Economy Report, etc. Meanwhile, in order to further
enhance the capabilities of the directors to perform their duties, the Company also
provided four training sessions on topics such as regulatory policy developments and
information disclosure to its directors throughout the year.
Indicator 2019
Number of Board meetings held throughout the year 6
Number of motions passed by the Board of Directors throughout the year 24
Number of training sessions for Board members 4
Encouraging Idea Exchange and Communication
In compliance with The Securities Law of the People’s Republic of China, The
Company Law of The People’s Republic of China, Shanghai Stock Exchange Stock
Listing Rules and other regulations, the Company has formulated its Information
Disclosure Management System and made continuous efforts to improve information
disclosure management, ensure the appropriate fulfillment of its information
disclosure obligations and protect the legitimate rights and interests of the Company
and its investors, creditors and other stakeholders.
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The Company actively communicates with its investors to build a harmonious and
trusting relationship. In 2019, the Company sent representatives to participate in more
than ten strategy meetings of brokerage firms, actively handled calls and on-site visits
from brokerage firms and investors, and organized field researches for investors,
including Industrial Securities, Haitong Securities, Guangfa Securities, Ping An Bank,
Taiwan Dongteng and other investment institutions. The visitors was able to have the
first-hand knowledge of the Company’s business strategy and operation models, and
was able to communicate with the front-line staffs to get a better and more timely
understanding of the Company.
Indicator 2019
Number of information disclosure documents released 65
Number information disclosure items of the Company released 47
Number of investor communication meetings organized 2
Promoting Exchanges and Cooperation for a Brilliant Future
On January 8, 2020, the 2019 Luen Mei Holding investor communication meeting was
successfully held in Beijing. Our Chairman introduced the industrial layout and
development of Luen Mei to more than 140 institutional and individual investors,
helping them know the Company better.
Investor communication meeting
Field research of investors
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1.2 Ensuring Integrity and Compliance
Integrity and compliance are an important guarantee for the long-term healthy
development of enterprises. The Company takes integrity and compliance as its
bottom line, and continuously promotes the awareness of compliance management as
well as optimizes governance and management capabilities to ensure operational
compliance and efficiency.
Internal control
With reference to the Basic Standards for Enterprise Internal Control, the Company
continued to standardize its internal control system, establishing regular accounting
closure and reporting system, and specifying regulations and policies on its capital
budgeting, operation, fund raising, guarantee and investment activities. The Company
continued to optimize its operation management and risk prevention capabilities to
ensure the compliance of all business activities with applicable laws, regulations and
regulatory requirements.
Besides completing its regular control and supervision responsibilities and special
supervision tasks, the Company regularly carries out internal control assessment to
realize its management targets and use them as risk and value benchmarks to guide its
efforts to improve operational efficiency and achieve continuous growth. As of the
end of 2019, the Company had over 95% of its total assets covered by its internal
control assessment.
The Company’s annual Internal Control Assessment Report is available together with
its Annual Report, both are accessible at the Shanghai Stock Exchange website
http://www.sse.com.cn.
Ensuring Business Integrity
Adhering to the guidelines of “no exception, full coverage, and zero tolerance”, the
Company is committed to ensuring business integrity and anti-corruption and adopted
a variety of measures accordingly, such as special inspections, regular inspections,
whistle-blowing hotlines and mailboxes, etc. In 2019, there was no incident of
corruption or violation of professional integrity among employees.
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Hunnan Heat-supplying Co., Ltd.: Reviving the Values
In order to strengthen the integrity and anti-corruption awareness among
employees, and highlight the leading role of party members, Hunnan Heat-
supplying Co., Ltd. organized party member employees to recite their vows, study
integrity and self-discipline principles, and sing revolutionary songs to celebrate the
70th anniversary of the birth of the nation.
“Reviving the Values” Party Day activities
Tax Policy Compliance
The Company adheres to lawful tax payment, educates employees on tax policy
compliance, and continuously improves its tax management practice. In 2019, the
Company paid a total of Rmb438 million yuan of taxes.
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1.3 Stringent Safety Management
The Company takes safety as its upmost priority. It has established a stringent safety
management system, implemented comprehensive and effective rectification and
control measures against safety hazards in production and operation activities, and
allocated adequate resources to strengthen safety protection facilities and equipment,
to prevent safety incident and ensure employee health and safety.
Strengthening safety management system
In accordance with the management concepts of “people-oriented, adhere to safety-
first, prevention-first and comprehensive control”, the Company has established a
series of systems and policies to optimize its safety management system, including
Safety Production Expense Management Measures, Safety Hazards Management
Measures, Special Hazardous Operations Management Measures, Safety Production
Reward and Punishment Management Regulations (Trial), etc., and ensured the
continuous and effective operation of its safety management with clear accountability,
specified focus and sound supervision.
The Company budgets 0.5% of its annual revenue on safety management, which will
be used for implementing safety technologies and rectification measures to meet
safety standards.
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Developing and implementing
Speicial annual plan for special safety
Safety inspection, at least one subsidiary
per month; information sharing of
Inspections inspection findings.
Regular Safety
Management
Compiling regular weekly and
monthly safety updates of
subsidiaries; implementing PDCA Safety
closed-loop management on System Construction
safety issues.
Standardizing safety management system,
including management structure, safety targets,
safety accountabilities, etc.; promoting
subsidiaries to strengthen safety management
system.
The Company has established the Part-time Safety Administrator system and
implemented a dual-track safety management model at front-line production units to
ensure workplace safety. Employees recommended by their departments could
become part-time safety administrators after completing relevant training and
assessment, who will assist with the day-to-day workplace safety management under
the guidance of the Safety Supervision Department of the Company. The Company
also regularly organizes themed trainings and drills for the part-time safety
administrators to help them improve their safety management knowledge and
problem-solving capabilities.
Preventing Safety Hazards
To ensure the timely elimination of safety hazards and prevent accidents, the
Company has formulated The Safety Hazard Management Measures, established a
safety expert team, and specified detailed hazard prevention protocols, building a
standardized, institutionalized, and normalized long-term mechanism for hazard
screening and prevention.
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Analyze safety hazards comprehensively and classify them into five
categories according to their sources and types, including personal safety
hazards, electricity safety accident hazards, equipment and facilities
Classification accident hazards, safety management hazards, and other accident
hazards.
Classify hazards into major hazards (including Grade I major hazards
and Grade II major hazards) and general hazards based on severity.
In accordance with the principle of prudence, a hazard is classified based
Identification on its most severe direct consequences. Hazards of different types are
also classified based on its most severe accident/incident possibilities.
Daily screening: including daily patrol inspection, “spot check” and
regular analysis of equipment, and daily inspection carried out by
production management personnel at all levels.
Regular screening: including regular (preventive) inspections carried
Screening bout technical supervision personnel; major hazard assessment, safety
risk assessment, and seasonal safety inspections in spring, autumn and
flood seasons.
Special screening: including special or dedicated inspections carried out
due to state, industrial or enterprise level safety incidents or accidents.
General hazards are supervised at the subsidiary level, and major
hazards are managed at the headquarters level.
Analyze safety hazards at monthly safety diagnosis meetings, safety
committee meetings or special meetings, and formulate and implement
Rectification rectification plans accordingly to ensure the closed-loop management of
hazards.
Implement both review and supervision notification models, subsidiaries
with major hazards will receive notification and on-site supervision and
inspection, so as to timely follow the rectification progress.
General hazards are inspected and reviewed by the relevant department
at each subsidiary, and the safety supervision department at the
subsidiary will supervise the review the result of rectification.
Review of Rectification of major hazards will be reviewed by relevant department
rectification at the headquarters at the request of subsidiaries. If a regulatory body is
involved, the hazards will go through the internal review process first,
and the external review process afterwards. Only after being cleared by
both reviews, the hazards can be delisted from the system.
Each subsidiary shall establish a hazard log to record the screening and
rectification of hazards. The subsidiaries are required to submit their
Safety Accident Hazard Screening and Inspection Table to the
headquarter before the 5th day of each month, and report hazard
Reporting screening and rectification information from the previous month to the
government.
Major hazards are reported in real time, and their rectification process
are also reported timely through the enterprise information integration
system.
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In 2019, the Company carried out a number of special safety inspections and screened
out 88 safety hazards. Among them, 72 hazards have been rectified. For the remaining
16 hazards, the Company had already formulated rectification plans and started the
implementation of the rectification plans.
Ensuring Workplace Health and Safety
The Company strictly abides by The Law of the People’s Republic of China on the
Prevention and Control of Occupational Diseases, comprehensively evaluates
occupational hazard factors in its production and business activities, conducts
environmental monitoring of workplaces, implements prevention and control
measures for occupational disease hazards, and strives to eliminate hazardous factors
in the workplace. Meanwhile, the Company issues Occupational Disease Hazard
Notice when signing contracts with employees for positions with occupational disease
risk, specifying the potential hazards, occupational disease risks and the occupational
disease protection measures prescribed by the Company. The Company also attaches
great attention to workplace protection during its daily operations, and provides
employees with occupational health examination to comprehensively protect the
health and rights of its employees.
In 2019, the Company’s provided occupational health examination for all employees
with exposure to occupational disease hazards. There were seven incidents of work-
related injuries and no incident of work-related death occurred throughout the year.
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The Company has formulated The Management Measures of
Workplace Protection Gears, clarifying the purchasing principle of
workplace protection gears, formulating annual purchasing plans,
Workplace
compiling the catalogue of specialty workplace protection gears, and
protection gears
distributing appropriate and reliable workplace protection gears to
employees who needed them; and required all employees who enter
operation sites to wear proper protection gears.
The Company has formulated the Special Hazardous Operations
Management Standards for operations with complex hazardous factors
and high risk, and allocated employees who are familiar with the
Special operation
environment and risk factors in the operation area, with high technical
management
level and experience in handling emergencies to take charge or as
supervisor of the operation. The list of special hazardous operations is
updated annually.
The Company has formulated the Management Measures for Work-
related Injuries. Employees who are injured during work will be sent
to the designated hospital or the nearest medical institution for
emergency treatment. There is a cross-departmental mechanism for the
handling of work-related injuries: Safety Supervision Department
Handling of
conducts investigation, analysis and handling of the incidents, Human
work-related
Resources Department handles the filing and reimbursement of the
injuries
medical expenses of work-related injuries; and General Department
(Trade Union) arranges the treatment plans and coworkers to help, etc.
All work-related injuries will be handled in accordance with the Work-
related Injury Insurance Regulations and The Employee Leave
Management Policy of the Company.
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1.4 Practicing Responsible Procurement
The Company is committed to establishing an integrated, standardized and transparent
procurement management system to ensure efficient procurement and build long-term
and stable cooperative relations with suppliers. Besides ensuring supplier compliance,
the Company also evaluates its suppliers, encouraging them to uphold business
integrity, fulfill social responsibilities and improve their environmental and social
performance.
Fair procurement
The Company has formulated a strict supervision and whistleblowing system
regarding its procurement and bidding process, including whistleblowing channels in
bidding documents and delegating the Internal Control Department to participate in
key bidding processes. Anyone can report violations of laws and regulations in the
bidding process to the Internal Control Department, which will be thoroughly
investigated accordingly and the bidding project will be suspended or have its result
revoked if the reported violation is proved.
To ensure the fair participation and competition of small and medium-sized suppliers,
the Company has established a supplier registration system. Only registered suppliers
are eligible to participate in project biddings. Suppliers have not registered can also
participate if they pass the qualification review. Except for large equipment and
insulation pipes, more than 90% of the Company’s bidding projects do not require a
minimum size of registered capital for suppliers.
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Win-win Cooperation
During the procurement process, the Company requires suppliers meet relevant
environmental, safety and quality requirements for their products, and encourages
them to continuously improve and upgrade their products to better serve customers.
In order to deepen the cooperation with suppliers, the Company takes the initiative to
assess suppliers before bidding, and carries out on-site inspections and
communications with winning suppliers. In 2019, the Company had inspected a total
of 22 suppliers of engineering equipment, including the comprehensive evaluation of
factory scale, the comprehensive evaluation of product quality, the comprehensive
evaluation of technological capabilities, and comprehensive evaluation of their
business performance.
Indicator Unit 2019
Number of centralized procurement projects 876
Total budget of centralized procurement Rmb100 million 3.42
Average project cycle of centralized procurement day 20
Number of suppliers by region 532
Number of suppliers with contracts signed within the year 532
Number of suppliers managed with supplier management regulations 532
Supplier assessment coverage rate % 100
Number of CSR trainings for suppliers 297
Number of biddings for procurement of engineering and other services 125
Number of engineering and construction suppliers assessed 73
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2. RESPONSIBLE SERVICE
FOR CUSTOMERS
Sustainability Context
Heating is an important public utilities
service and an indispensable livelihood
necessity in certain modern cities. It is
closely related to the quality of life of
people. Aiming at providing satisfying
heating services for people, Luen Mei
Holding strives to keep growing and
innovating to provide safe, stable and
sustainable thermal energy, quality heating
service, and efficient customer service.
2.1 Ensuring Stable Heating Supply
With a solemn commitment to providing stable, safe and quality heating service for
all customers, the Company takes a variety of measures to provide thousands of
households with quality heating services to warm up their winter days.
Adhering to the “quality-first” principle, the Company formulated The
Project Quality Management Measures (Trial), The Heating Source and
Heating Pipeline Construction Project Acceptance Management
Measures (Trial), Level I Pipeline Project Construction Management
Ensuring
Measures (Trial), and Level 2 Pipeline and Heat Exchange Station
project quality
Project Construction Management Measures (Trial), etc., and carried out
on-site inspections on material, welding work and thermal insulation of
projects, ensuring full-process quality management of construction
projects.
Timely maintenance of existing pipeline is a key aspect to ensure the
stable supply of heating service. Every year, the Company conducts
inspections and maintenance of key areas based on the heating situation
of the previous year and conducts a trial operation of the pipeline before
Optimizing
the heating season starts to identify and solve problems in advance. In
heating
2019, the Company completed a total of 173 heating pipeline
pipeline
maintenance and upgrading projects and 124 heating source maintenance
and upgrading projects, and carried out the trial operation smoothly,
laying a solid guarantee for providing customers with stable heating
service during the coming heating season.
The Company formulated The Management Measures for the Notification
of Heating System Accidents, requiring its subsidiaries to report all
production incidents that affect heating quality. Incidents are categorized
Improving into general incidents, main incidents, major incidents and extraordinary
emergency incidents according to factors such as the scope of impact and the time it
plans takes to fix them. When an incident occurs, the Company will
immediately activate the emergency response mechanism to complete the
relevant work accordingly, such as incident reporting, problem solving,
and customer notification, etc.
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Ensuring Heating Quality During the COVID-19 Epidemic
During the 2020 Chinese New Year holidays, there were frequent rains, snows and cold
waves throughout the country. The China Meteorological Administration once initiated
a Level III cold wave and blizzard emergency response plan. Moreover, the outbreak of
the Covid-19 epidemic coincided with the heating season in North China. The
Company activated a variety of emergency plans to ensure secure and quality heating
service and create a warm environment for front-line medical workers and community
residents.
Required all heat-supplying subsidiaries Formulated emergency plans in
to increase heating parameters and advance and asked the emergency
heating standards in advance to ensure team to standby 24-hour a day to
24-hour above-standard residential deal with possible heating
room temperature, and allocated disruptions and ensure smooth
dedicated personnel to oversee the heat- operation.
supplying work for 38 designated
Purchased enough coal to ensure
medical institutions and fever clinics.
secure fuel supply for power and
Set up 24-hour service hotlines at all heat generation.
departments to handle customer
complaints efficiently, ensuring
satisfying temperatures at their homes.
Guorun Low-carbon Thermal Power CO., Ltd.: Improving heating facilities and
heating methods to benefit residents
Guorun Low-carbon Thermal Power Co., Ltd. provides heating service for several old
residential neighborhoods, where antiquated heating facilities affected the heating effect
in winter. In order to ensure quality heating service for local residents, in 2019, Guorun
Low-carbon invested about Rmb1.2 million to upgrade the heating facilities in these old
residential neighborhoods it served, replacing 2413 valves with serious corrosion and
584 meters of secondary network pipeline, and effective improved the quality of
heating.
Guorun Low-carbon Thermal Power Co., Ltd. also invested Rmb2.72 million to lay 400
meters of primary pipeline and build a new heat exchange station in a neighborhood to
replace the previous heating model with water source heat pumps to centralized heating
that has better heating quality.
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2.2 Strengthening Research and Innovation
Technological innovation is a core competence of the Company. Luen Mei Holding is
committed to providing customers with better heating experience and services through
continuous technological innovation. As of the end of 2019, the Company owned 22
patents, including nine invention patents. In 2019, the Company had filed 25 patent
applications and had seven research projects under development. It owns scores of
patents, including fixed-bed boiler with laminated combustion, water surface multi-
tube self-excited wave generation for flue treatment, combined supply of distributed
clean energy and centralized heating, self-cleaning heat pump, and intelligent
household temperature control and meter device, etc. Its subsidiary Guohui New Eco-
energy Co., Ltd. is a rare high-tech enterprise in the heating industry and a post-
doctoral innovation and practice base of Liaoning Province, and has developed a
number of patented technologies related to the heating supply field.
In 2019, the Company invested a total of Rmb23.796 million in research and
technological innovation.
The flue dedusting, desulfurizing, denigration, and dehumidifying-recycling
and residual heat recycling technology was highly recognized by China
Renewable Energy Society and Liaoning Renewable Energy Society.
The industry-leading heat combinations in primary, secondary, and micro
areas proposed by the Company was in the process of becoming proprietary
technologies with independent intellectual property rights, which the outstanding
environmental benefit of reducing pollutant emissions from the thermal
generation process by over 30%.
Shenyang Water Bay Park is a project focusing on water source heat pumps
with the biggest unitary installed capacity in China. It is a pioneer and takes the
lead internationally in autonomously developing self-cleaning technologies for
heat pumps.
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Intelligent Household Temperature Control and Meter Device
While most areas in North China have completed the transformation to centralized
heating, the limited application of real-time indoor temperature adjustment still
prevents people from having personalized heating settings. Guohui New Eco-
energy Co., Ltd. developed a household customized temperature control system for
centralized heating customers as a solution to this challenge.
The device is easy to install. Through wireless remote data transmission and
control, it not only allows the customers to control heating settings remotely to have
their desired room temperature, but also can accurately collect and upload
temperature and heating data to a customized user account, ensuring billing
accuracy and satisfying the customized heating needs of customers at the same
time.
The device can also detect incidents and sent alerts for incidents such as leakage or
misuse of heating water, allowing the heating service provider to respond promptly
to minimize the losses to customers even when there is nobody at home.
2.3 Improving Customer Service System
The Company is committed to providing customers with quality heating experience
and services, and has made a series of efforts accordingly, including guaranteeing 24-
hour quality heating service during the heating season, providing low-temperature
heating for the periods before or after the heating season with cold weather, and
flexible and customer-friendly billing methods. During the heating season, the
Company deploys a quick response mechanism with dedicated personnel to address
customer needs, including 24-hour door-to-door maintenance service.
In 2019, the Company served nearly 650,000 households and over 2,000,000 residents
in Shenyang City, and handled more than 50,000 customer inquiries, maintenance,
and other service requests without leaving any customer unsatisfied.
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Launched mobile App and enabled competition among employees to
encourage them to respond to customer requests with greater enthusiasm.
Improving
Included customer requests handling in employee performance evaluation,
service provided regular training for customer service personnel, and encouraged
efficiency and employees to improve customer service.
Sent timely notification to customers, either by posting posters or through
quality
WeChat, regarding key scenarios, such as billing, leakage testing, starting
of heating, and having service problems.
Heating customers with bedroom or living room temperature lowering
than 18℃ even after maintenance were be given improvement plan or
economic compensation.
Formulated the Compensation Measures for Leakage Damages, and
customers who suffered property damage caused by heating water leakage
Protecting due to the Company’s reasons will be compensated after the damage is
customer surveyed and the compensation plan is approved.
rights Provided heating fee exemption to public welfare customers, and
customers requiring changing their heating mode or low indoor
temperature.
Implemented the policy of “All requests get answered” policy to ensure
100% closed-loop handling and feedback of customer requests to improve
customer satisfaction.
Ensured the service hotline (25948888) for heating maintenance, billing
questions, and customer complaints have 24-hour uninterrupted service
Ensuring
during the heating season (November 1 to March 31).
smooth Launched the Internet service App and the “366e Life” WeChat enterprise
customer platform, enabling customers to file maintenance requests, make inquiries
and pay bills online.
communication
Handled customer requests and feedback through government websites,
business halls, media and other channels.
Set up a dedicated customer service team and an integrated call center to
handle all heating related customer inquiries, maintenance requests and
complaints.
Listening to Formulated the First Responder Accountability mechanism, requiring the
employee first contacted to oversee the entire process of handling the
customers customer request, including asking for customer feedback.
Promoted a service culture among all employees, encouraging employees
to take responsibility to handle customer requests to improve customer
experience.
Protecting Protected customer information with dedicated system and personnel with
clearly specified authorization.
customer
Required customers to present appropriate IDs before providing billing,
privacy service suspension or contact information that requested by them.
Provided door-to-door service for customers with physical difficulties to
Caring for leave their homes, and set up dedicated online customer service personnel
disadvantaged to serve customers with special needs.
groups Equipped service halls with chairs, drinking water and emergency kits to
better serve customers.
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Shenyang Xinbei Thermoelectric Co., Ltd.: Providing convenient services to
customers
Before the 2019 heating season started, ShenYang Xinbei Thermoelectric Co., Ltd.
arranged employees to visit the areas with high customer complaint rates
historically and communicate with representatives of property companies,
homeowners and community workers to understand their heating needs. It also
strengthened the training for customer service personnel and door-to-door
maintenance personnel to improve customer service.
Shenyang Xinbei Thermoelectric Co., Ltd. also distributed service cards printed
with its 24-hour service hotline number to customers, ensuring timely maintenance.
Indicator Unit 2019
Customer service hotline satisfaction rate % 100
Online customer service satisfaction rate % 100
Customer complaint resolution rate % 100
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3. GREEN AND
ENVIRONMENTALLY
FRIENDLY DEVELOPMENT
Sustainability Context
Lucid waters and lush mountains are invaluable
assets. China has been vigorously promoting
green development, implementing the three
action plans for prevention and control of air,
water and soil pollution, and taking the lead in
issuing The National Plan for Implementing the
2030 Agenda for Sustainable Development in
China, and implemented The National Plan for
Addressing Climate Change (2014-2020).
Through these unremitting efforts, ecological
and environmental protection in China has
undergone historic, transformational and overall
changes. Luen Mei Holding firmly upholds the
development concept of low-carbon and
environmental protection. Focusing on clean
heating, the Company constantly improves its
environmental management capabilities, and
strives to reduce its environmental footprint and
contribute to the construction of a beautiful
China by adjusting its energy structure and
further intensifying its energy conservation and
emission reduction efforts.
3.1 Improving Environmental Management System
The Company regards the improvement of the environmental management system as
a top priority, and strictly abides by relevant state and local environmental laws,
regulations and standards, including The Environmental Protection Law of the
People's Republic of China, The Air Pollution Prevention Law of the People's
Republic of China, Opinions of the State Council on Strengthening Key
Environmental Protection Work, Environment Protection Regulation of Construction
Projects, Thermal Power Plant Air Pollutant Emission Standards, and Boiler Air
Pollutant Emission Standards, etc. The Company has formulated The Luen Mei
Holding Environmental Management Measures to integrate environmental protection
into business operations, striving to strictly control pollution and minimize the amount
of emissions, affluents and solid wastes generated during its production process
through the implementation of a number of management measures, such as ensuring
environmental protection accountability, following environmental protection and
safety operational procedures (including accident prevention and emergency plans),
keeping operation logs and journals, and setting inspection standards for the purchase
of desulfurization and denitrification agents, etc.
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Environmental Management System of Luen Mei Holding
Headquarters level
To provide detailed technical requirements for new construction,
Design
maintenance and technical transformation of environmental protection
Management
facilities, and review and evaluate the produce design, processing
Department
capacity, operational stability and economy of suppliers’ products and
solutions.
Centralized To select suppliers of environmental protection facilities and supplies
Purchasing according to the requirement of the Design Management Department,
Department sign contracts, and ensure maintenance and product accountabilities.
Engineering To supervise the environmental protection, work in external projects,
and Cost such as the restoration after construction, dust suppression during
Management construction, and inspect the quality of environmental protection
Department supplies.
Production To supervise the company-wide operation of environmental protection
Management facilities and coordinate environmental protection related affairs within
Department the company.
Subsidiary level
To formulate the subsidiary’s environmental protection policies based on
the company’s regulation, cooperate with local environmental protection
agencies, in charge of the operation, management and maintenance of
Production
Technology, environmental protection facilities of each subsidiary, initiate and
Operation supervise major repairs, technical transformation and new construction
and Other projects of the affiliated company’s environmental protection facilities,
Departments test environmental protection supplies, and record discharges and the
operation of environmental protection facilities, so as to ensure the
regular, safe, reliable and economical operation of environmental
protection facilities.
The environmental protection work of the Company focuses on the following aspects:
treatment of air pollution caused by flue gas generated by boiler combustion;
treatment of dust caused by the storage of coal and other materials; treatment of waste
water from production and living quarters; reduction of noise and vibration; treatment
of production waste and environmental greening; and environmental protection
measures for construction projects such as enclosure and dust reduction measures, and
the restoration of roads and greening after construction.
The Company has formulated its own environmental self-monitoring plan in
accordance with national standards, and entrusted qualified third parties to conduct
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inspections and disclosed the monitored data publicly. The Company also allocated
dedicated personnel focusing on chemical and environmental management work.
The Company had adopted a number of pollution control technologies to reduce its
emissions, including the low-nitrogen combustion technology, and SNCR and SCR
flue gas denitrification system to control nitrogen oxides emissions, and the electric-
bag filter and fabric-bag filter to control particulate matter emissions, and the in-
furnace calcium spraying, lime-gypsum wet method, the magnesia wet method, the
slaked lime-sodium carbonate double-alkali method, and the circulating fluidized bed
method flue gas desulfurization system to control sulfur dioxide emissions. In 2019,
all pollution prevention and control facilities of the Company operated properly,
allowing it to meet national and local environmental protection and emission
standards and pollution control requirements.
Guoxin New Eco-energy Co., Ltd.: Multiple efforts to reduce environmental
impact
Guoxin New Eco-energy Co., Ltd. strictly conducts daily and weekly energy
consumption analysis and benchmarking of its production and operation, to timely
identify abnormal energy consumption indicators and make adjustment accordingly.
To further bring down its emissions, it adopted circulating fluidized bed boilers
with high combustion efficiency, wide coal compatibility, and a large load
adjustment range, as well as boiler equipment with low-nitrogen combustion
technology. It also adopted back-pressure generators to produce steam in certain
some areas to feed the residual steam from the power generation process to heating
pipeline, which reduced cooling costs and realized the recovery and reuse of steam
and the closed-loop treatment of water.
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Luen Mei Bioenergy Co., Ltd.: Comprehensive measures to control pollution
Luen Mei Bioenergy Co., Ltd. is committed to minimizing the environmental
impact of emissions and effectively reducing pollutant emissions through sound
environmental management.
Treating flue gas from combustion by using cyclone dust collector, bag filter
and the ultra-low emission dust removal method, as well as desulfurization and
denitrification processes before discharging it through an 80-meter chimney.
Reducing dust by using wind proof and dust suppression net around stockyard,
using sprinkler truck on roads regularly, and building a sealed material
warehouse.
Controlling possible noise pollution by choosing low noise equipment,
rationalizing layout for high noise sources, and allying effective noise
reduction measures such as vibration reduction, sound insulation and noise
cancellation, etc. Noise reduction equipment is installed at the inlet and exhaust
fan of boilers, and the steam turbine and generator is fully enclosed in
protective cover for sound insulation treatment.
Indicator Unit 2019
Ammonia nitrogen emissions ton 0
NOx emissions ton 2074
SO2 emissions ton 850
Diesel consumption liter 124200
Biomass fuel consumption ton 336141
Electricity consumption MWh 193674
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3.2 Responding to Climate Change Actively
The Company actively responds to China’s policies and actions to address climate
change, promotes energy structural transformation, prioritizes the use of low-carbon
clean energy, and accelerate environment-friendly modification of thermal plants.
While efficiently meeting the centralized clean heating needs of the areas it currently
serves, the Company has also achieved a 100% clean heating rate and greatly reduced
its carbon and pollutant emissions from its operations.
The Company actively promotes the use of clean energy such as biomass
energy and has accumulated unique technological and regional layout
advantages in the field of biomass energy. Its subsidiary Luen Mei
Bioenergy Co., Ltd. is the first biomass combined heat and power
generation unit to adopt high-parameter units in China and can process
about 240,000 to 300,000 tons of biomass per year with its 30 MW
generators and 2*75 tons/hour steam boilers. Compared with industry
Using clean
average, it has better unit steam consumption and unit fuel consumption,
energy
as well as a wider range of biomass fuel adaptability. In addition, Luen
Mei Bioenergy Co., Ltd., as one of the earliest biomass company to realize
cogeneration of heat and power in China, has realized the high-efficiency
and clean cogeneration using renewable energy through the technology of
“combined grate technology + unit high parameter and high speed +
cogeneration + ultra-low flue gas emission”, producing a combination of
electricity, steam and low-grade waste heat.
The Company requires all construction projects to pay attention to
Energy
environmental protection, and go through environmental impact
conservation
assessment and acceptance processes required by laws and regulations. It
and
also adheres to green production and green operation, continuously
emissions
optimizes the operating efficiency of boilers and other equipment to reduce
reduction energy consumption through technological transformation.
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Luen Mei Acts up to Provide Clean Heating
Luen Mei Holding produces and utilizes clean energy with four business
operations, clean coal-fired high-efficiency cogeneration, renewable water source
heat pump (WSHP) heating, biomass cogeneration and natural gas-based
distributed cooling, heating and power supply.
Clean coal-fired high-efficiency cogeneration: As a highly efficient way for
the cogeneration of heat and power, the Company uses different grades of heat
energy for different purposes (high-grade for power generation, low-grade for
centralized heating) to improve energy efficiency, reduce environmental
pollution, and achieve the comprehensive benefits of reducing both energy
consumption and environmental impact, and achieving better heating quality
and greater amount of electricity production.
Water source heat bump using reclaimed water: The Company uses
reclaimed water as a cooling and heating source, according to the
characteristics that the temperature of reclaimed water is higher than outdoor
temperature in winter and lower in summer, to utilize the low-grade energy in
reclaimed water that cannot be directly used to provide heating and cooling for
buildings, which reduces energy consumption, improves operational stability,
and reduce the impact on the environment.
Biomass cogeneration: Biomass raw materials include agricultural waste,
animal waste, forestry wood waste, specialty energy plants, municipal solid
waste and landfill gas, sewage treatment biomass gas, urban wood waste and
food residue. Biomass cogeneration is a comprehensive energy system with
stable supply, which can make multiple use of resources to achieve full life
cycle zero carbon emission, and greatly reduce the impact on the environment.
Natural gas-based distributed cooling, heating and power supply: Mainly
based on the comprehensive factors such as the energy load needs of the
customers as well as the external constraints, the system is integrated with
flexibility and has the characteristics of better power structure, higher energy
efficiency, cleaner and less environmental impact, safe and reliable power
supply, and more balanced peak-valley fluctuations.
Indicator Unit 2019
Total amount of electricity generated 10,000 kWhs 55215
Amount of electricity generated with biomass 10,000 kWhs 21772
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3.3 Promoting Rational Utilization of Resources
Attaching great importance to the rational utilization of resources, the Company
innovates technologies in the production and operation process, and encourages
employees to put energy-saving, low-carbon, and green concepts into conscious
actions to continuously improves its energy conservation and environmental
protection performance.
The Company strictly abides by the relevant provisions of The Water Law
of the People’s Republic of China to manage its water intake and sewage
Water treatment, and implements water recycling projects, strive to reduce
resource sewage discharge and improve water resource utilization efficiency. It
management also posts water-saving reminders on office premises and project sites to
encourage employees to save water resources in their daily work and
enhance their awareness of water conservation.
The Company strictly abides by the relevant provisions of The Law of the
People's Republic of China on the Prevention and Control of
Environmental Pollution by Solid Wastes, resolutely prevents and controls
Waste solid wastes from polluting the environment, and conducts centralized
management collection and management of wastes. The solid waste generated by the
Company in the production and operation process mainly include ash,
filter residue, and desulfurized gypsum in the boilers. Each subsidiary
delivers its waste to a qualified third party for disposal off-site.
Indicator Unit 2019
Total water consumption cubic meters 3314194
Total recycled water consumption cubic meters 1275476
Percentage of recycled water in total water consumption % 38.49
Number of video conference calls 159
Energy savings equivalent from reduced business travels ton 2
Number of computers recycled 30
Number of toner cartridge recycled 50
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4. GIVING BACK TO SOCIETY
AND CREATING A BETTER
FUTURE TOGETHER
Sustainability Context
Luen Mei Holding adheres to the concept of
“Connect the Future and Enrich Life” and is
committed to continuously contributing to
creating better life for people. The Company
actively pursues the win-win industry-
university-research cooperation, encourages
career development of employees, and gives
priority to address community needs and
encourages employees to devote themselves
to support public welfare and contribute to
community development.
4.1 Win-win Cooperation with the Industry
Luen Mei Holding actively cooperates with other businesses and universities and
research institutions to synergize and integrate the expertise and resources of different
types of organizations, so as to promote the Company’s technological innovation and
accelerate its development towards lower energy consumption and higher efficiency.
Established long-term cooperative relationship with Huolinhe Opencut Coal
Industry Co., Ltd. to seek complementary development to each other.
The Company’s subsidiary, Guohui New Eco-energy Co., Ltd. is a postdoctoral
innovation practice base of Liaoning Province, giving the Company the
advantage of “technology + talent” to further promote energy conservation and
environmental protection.
Guohui New Eco-energy Co., Ltd.: Realizing complementary advantages with
industry-university-research cooperation
Guohui New Eco-energy Co., Ltd. has signed a number of cooperation agreements
on setting up shared laboratories, joint research program application, forming
industry-university-research alliance, and promoting industry talent development
with Shenyang Institute of Applied Ecology of the Chinese Academy of Sciences
and Shenyang University. In the future, the Company will adhere to the principles
of “green, low-carbon, energy-saving, environmental protection and recycle” to
actively engage in industry-university-research cooperation. The research and
development advantages of the cooperating institutions in circular economy
and low-carbon technology
will help with the
technological upgrading and
industrialization of the
Company, further enhancing
its capability to respond to
climate change and energy
saving and emission reduction
challenges.
Signing ceremony of the cooperation agreement
41 / 61
4.2 Growing Together with Employees
Only with the hard work of each employees, can an enterprise realize long-term
development. Luen Mei Holding attaches great importance to the protection of
employees’ rights and interests, provides employees with an equal working
environment, and encourages career development by a variety of training programs
and a sound promotion system.
Protecting Employee Rights
The Company strictly abides by The Labor Law of the People’s Republic of China,
The Labor Contract Law of the People’s Republic of China and other relevant laws
and regulations, adheres to the principle of “equality, fairness and openness”, and
respects and protects the legitimate rights and interests of all employees.
The Company regularly updates its salary and welfare system, ensures its
employees are paid at par or above the regional average salary, and
Salary and provides employees with full social security coverage and the highest
welfare housing fund percentage. As of the end of 2019, the Company has a 100%
social security coverage rate and a 100% signing rate of labor contracts
among its employees.
Talents are recruited through three channels: open recruiting for function
Talent departments, open recruiting for production positions, and campus
recruiting recruiting. In 2019, the Company focused on campus recruiting to steadily
promote its talent development.
All subsidiaries regularly hold employee general meetings to actively listen
to and address the needs of employees. In Hunnan Heat-supplying Co.,
Employee
Ltd., employee representatives from each department attended the 2019
Participation
employee general meeting and jointly deliberated and voted on the reform
plans of salary and other systems.
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Innovating on campus recruiting
In 2019, the Company upgraded its campus recruiting and training programs and
created several branded campus recruitment programs to attract young and
energetic college graduates.
Quantum Star Talent Plan is a special training program designed for new
graduates, which helps them achieve fast growth through dedicated training
and on-the-job training at rotated positions. A total of 36 new graduates were
recruited through this program during the year.
The Good Rep Student autumn campus recruiting plan was implemented in
September. The Company formulated detailed criteria that focusing on the
comprehensive quality of new graduates and assigned dedicated personnel in
charge of the screening process. A total of 47 outstanding new graduates were
recruited through this program during the year.
Indicator Unit 2019
Total number of employees 2746
Employee education background
High school and below % 33
College graduate and associate college % 65
Master degree or above % 2
Employee diversity
Female employee ratio % 13
Male employee ratio % 87
Female employee ratio in middle management % 13
Female employee ratio in senior management % 6
Employee age distribution
30 years or younger % 24
Between 30 years and 50 years % 46
50 years or older % 30
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Employee Promotion and Training
Based on its management and development needs, the Company provides equal
development opportunities for different categories of positions, encourages employees
to develop their professional stills and pursue long-time career growth, provides them
with sufficient career development space, and leverages both internal and external
training resources to help employees improve their capabilities.
The Company has formulated training systems, such as the Internal
Lecturer Management System, the Talent Development Management
System, and the New Graduates Mentoring System, and continuously
improved the talent recruiting system, prepared training materials and
assessment system for new recruits, and standardized the training
Expanding key process.
training
In 2019, Guorun Low-Carbon Thermal Power Co., Ltd. launched a
training course on emergency response measures after main power
supply unit outage; Guoxin New Eco-energy Co., Ltd. organized
employee trainings on standardized operation protocols, distributed
learning materials, and organized on-the-job practical exercises.
The Company has established dedicated promotion plans for employees
Optimizing to replace the monolithic and administrative promotion channels for
career path management staff, providing employees with more choices and
encouraging them to develop their own expertise and grow.
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Employee Skills Competition
In order to help employees to improve skills and give them an opportunity to
showcase their excellencies, the Company regularly organizes a variety of skills
competitions, allowing the employees to both exhibit their skills and cultivate
teamwork and cooperation with colleagues.
Employee skills competition
Employee skills competition winners Gold Medal Craftsman program winner
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Internal Recruiting through Open Competition
In 2019, the Company carried out five open competition activities. A total of 42
management staff were selected and appointed from more than 150 employees,
including six general managers of subsidiaries, nine deputy/assistant general
managers, 16 middle-level directors of core production departments, etc. Internal
recruiting through open competition not only optimized the management team of
the Company, but also promoted the employees to have better career choices based
on their capabilities and interests.
Indicator Unit 2019
Total number of employees participated in training 1309
Training participation rate of female employee % 10.12
Training participation rate of senior management staff % 1.88
Training participation rate of mid-level management staff % 5.35
Training participation rate of front-line management staff % 82.79
Total training expenses 10,000 yuan 19.3131
Total participants in trainings related to job responsibilities person-times 2217
Average training time per employee hours 3.11
Average training time of senior management staff hours 2.93
Average training time of mid-level management staff hours 3.07
Average training time of grass roots staff hours 3.53
Average training time of female employees hours 1.8
Average training time of male employees hours 4.28
Number of trainers (both internal and external) 75
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Caring for Employees
The Company adheres to the enterprise culture of “healthy development and happy
work”, and makes various efforts to help employees balance work and life. In 2019,
the Company organized a variety of employee caring activities to both enrich
employees’ spare time and enhance their sense of identity and belonging to the
Company.
Caring for Female Employees
Each year on March 8th, Women’s Day, the Company organizes seminars, beauty
classes and other activities and prepares holiday gifts for female employees. The
Company also takes the initiative to set up nursing rooms in workplace for nursing
mothers.
Women’s Day activity A nursing room in workplace
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Guorun Low-carbon Thermal Power Co., Ltd.: Caring for the mental health of
employees
In order to raise employees’ awareness of mental health and help them manage
stress and stay positive and optimistic, Guorun Low-carbon Thermal Power Co.,
Ltd. provided employees with psychological counseling and organized outdoor
team-building activities. It also made efforts to understand the employees’ thoughts
and needs, and developed open grievance channels to help them deal with their
difficulties in a timely manner.
Luen Mei Bioenergy Co., Ltd.: Organizing May 4th Youth Event
Every year, Luen Mei Bioenergy Co., Ltd. organizes the “May 4th Spirit” theme
activities to promote youth spirits and enrich the leisure time of employees with
activities such as basketball games and fun sports, aiming at fostering a healthy and
active way of life among young employees.
Dumpling-making Competition between Subsidiaries
Making and eating dumplings is an essential festival activity during the Chinese
New Year in North China. Every Spring Festival, Guoxin New Eco-energy Co., Ltd.
and Guorun Low-carbon Thermal Power Co., Ltd. organize a dumpling-making
competition for their employees, creating an opportunity for them to know each
other better and welcome the new year together in a joyful spirit.
Dumpling-making competition
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Hunnan Heat-supplying Co., Ltd.: Writing down your New Year wishes
Before the Chinese New Year, Hunnan Heat-supplying Co., Ltd. organized a Spring
Festival couplet writing event for employees, asking them to share their best wishes
for the coming new year into Spring Festival couplets.
Chinese New Year festival activities
Heart-to-heart, a “Guardian” of Employees
The Company regularly conducts home visits to employees in need to get first-hand
understanding of their difficulties and help, making sure the employees and their
families could have the support to deal with their difficulties.
Home visits of employees with difficulties
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Celebrating employees’ birthdays
New year games in workplace
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4.3 Contributing to a Harmonious Society
Besides creating economic benefits, Luen Mei Holding also focuses on giving back to
communities. The Company leverages its advantages in human resources, capital and
technology to promote local economic development, support public welfare causes,
encourage employees to participate in community service and volunteering activities,
making active contributions to the development of a harmonious society.
Open day events
Organizing site visit for students
Hunnan Heat-supplying Co., Ltd. Family Day
Site visits from community groups
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Guoxin New Eco-energy Co., Ltd.: The Warm House program for old communities
The old community within the service area of Guoxin New Eco-energy Co., Ltd. has a
heavy heating load. In order to promote the heating renovation and upgrading of the
surrounding communities and a nearby housing project for teachers, the Company
implemented the Warm House program. It leveraged its professional expertise and
actively communicated with local government agencies, housing administration, and
heating administration office, and community residents to come up with a satisfactory
solution to providing heating service for these old communities.
Fulfilling social responsibilities and supporting public welfare undertakings
The Company cares for the welfare of the
disabled. It regularly donates to the
Dongling District Charity Association and
calls on its employees to actively
participate in volunteering services. The
Company was awarded the title of Charity
Fundraising Enterprise for Helping the
Disabled.
Hunnan Heat-supplying Co., Ltd. employees providing community services
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5. FEATURE: LIGHTING UP
HIGH-SPEED TRAIN
TRAVELS WITH DIGITAL
MEDIA
Since the concept of “New Infrastructure
Construction” was put forward at the Central
Economic Work Conference at the end of 2018,
New Infrastructure has gradually become a key
direction to stimulate investment and expand
demand. As one of the seven major areas related to
New Infrastructure, the rapid development of
intercity high-speed railway and intercity rail transit
systems will drive the development of an overall
industrial chain. As new rail lines connect more
cities and move more travelers, there is great
growth potential for value-added advertising
services.
As one of the earliest companies specialized in the
digital media business in railway stations in China,
Mega-info Media, a subsidiary of Luen Mei
Holding, currently has the most digital media
resources of railway passenger stations. As of
December 31, 2019, the advertising media network
of Mega-info Media covered 28 provinces with a
network of over 5600 digital media terminals
located in more than 500 railway stations it has
contacts.
5.1 Promoting Efficient Communication
In 2019, Mega-info Media continued to optimize station quality and upgrade media
resources, which had significantly improved media quality and advertising effects,
and increased the efficiency of communication.
Building nationwide coverage to improve communication efficiency: The
media network of Mega-info Media covers major high-speed rail arteries that
runs through multiple well-off regions. With an integrated digital media
advertising broadcasting platform, the Company can help advertisers reach more
high-speed rail travelers and effectively expand the coverage of communication.
Optimizing information management to ensure prompt responses to
customer needs: With its secure and efficient network transmission capabilities,
proprietary processing technology, Mega-info Media has built an efficient
advertising broadcasting information platform that allows it to have centralized
control and network distribution of digital media advertising content.
Advertisements can be changed quickly and timely within 24 hours during
release, allowing the Company to fully meet customers’ needs for the timely
adjustments of advertising messages according to their marketing strategy.
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5.2 Raising Public Awareness to Support Public Welfare
Mega-info Media actively fulfills its social responsibilities and donates its large-
screen display resources to local railway authorities for playing public service
advertisement that aiming at raising public awareness of public welfare. In 2019,
Mega-info Media placed a total of 75 pieces of public service advertisements
nationwide with a total display time of over 6,500 hours.
During the 2019 Chinese New Year period (February 4 to February 28), played
public service advertisement on travel safety in Shenyang North Railway Station.
From May 27 to December 31, played public service advertisements every hour
in all railway stations in Fujian Province.
During the “November 9th Fire Prevention Day” period (from November 8 to
November 30), played public service advertisements on fire safety twice an hour
in Guangzhou South Railway Station.
Public service advertisement on promoting environmental sanitation and civilized
behavior for travelers
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Supporting the September 5th Public Welfare Day
In 2019, the September 5th Public Welfare Day initiated by Alibaba focused on the
theme of “believing the greatness of small things”, aiming at promoting Internet
merchants and consumers to support public welfare during the Public Welfare
Week. To help the event have greater influence, Mega-info Media leveraged its
large-screen display resources in high-speed railway stations to play the September
5th Public Welfare Day themed public service advertisement repeatedly, allowing
the message to reach over 1.8 billion travelers from September 1 to September 9.
Public service advertisement promoting the September 5th Public Welfare Day
Celebrating the 70th birthday of the motherland
October 2019 marked the 70th anniversary of the founding of the People’s Republic
of China. To celebrate this proud moment, a National Day public service
advertisement was played six times per five minutes in Hohhot Railway Station
from September 9 to October 30.
National Day public service advertisement on display
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ESG RELATED POLICIES
Corporate Governance
Working Rules for the Strategic Development Committee of the Board of Directors of Luen Mei
Quantum Co., Ltd.
Working Rules for the Audit Committee of the Board of Supervisors of Luen Mei Quantum Co.,
Ltd. (Revised in 2019)
Rules of Procedures for the Supervisory Board of Luen Mei Quantum Co., Ltd.
Information Disclosure Management Policy Luen Mei Holding Co., Ltd.
Interim Measures for the Administration of Legal Affairs (Document No. HB-BF-FW-002）
Procurement Management Regulations - Tendering and Bidding Management Measures
(Document No.: LR-GD-ZB-001）
Supplier Eligibility Policy (Document No.: LR-BF-004）
Tendering and Bidding Management Measures - Management Measures for Bid Negotiation
(Document No.: LR-BF-ZB-003）
Management Measures on Workplace Safety Expenses (Document No.: HB- BF-YY-001）
Management Measures on “Two Votes and Three Systems” (Document No.: HB- BF-YY-010）
Management Measures on Engineering Safety (Document No.: HB-BF-GC-003）
Management Measures on Labor Protection Gears (Document No.: HB- BF-YY-004）
Management Measures for Part-time Safety Officers (Document No.: HB-BF-YY-005）
Management Measures on Safety Hazards (Document No.: HB- BF-YY-006）
Management Measures on Work-related Injuries (Document No.: HB-BF-YY-007）
Management Measures for Special and Dangerous Operation (Document No.: HB-BF-YY-009）
Management Measures on Workplace Safety Rewards and Disciplining (Document No.: HB-GD-
YY-002）
Environmental
Environmental Protection Management Measures (Document No.: HB-BF-YY-002）
Regulations on Management of Engineering Procurement (Document No.: HB-GD-CHB-002）
Management Measures on the Construction of Primary Network Project (Trial) (Document No.:
HB-BF-GC-001）
Management Measures on the Construction of Secondary Network Project and Heat Exchange
Station Project (Trial) (Document No.: HB-BF-GC-002）
Management Measures for Maintenance and Technical Transformation Projects (Trial)
(Document No.: HB-BF-GC-003）
Measures for Management of Construction Units (Trial) (Document No.: HB-BF-GC-004）
Management Measures on Engineering Project Quality (Trial) (Project No.: HB-BF-GC-005）
Management Measures for Acceptance of Heat Source and Heat Supply Network Construction
Project (Trial) (HB-BF-GC-006)
Social
Management Policy on Employee Training
Management Regulations on Employee Team Building Activities
Management Policy on Apprenticeship for Fresh Graduates
Management Policy on Internal Lecturers
Management Policy on Employee Peer Recommendation
Management Policy on Talent Development
Management Policy on Salary and Welfare Management
Management Policy on Employment Hiring
Management Policy on Employee Labor Contract
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GRI STANDARDS INDEX
Report content GRI standards disclosure items
Company Profile GRI 102-1; GRI 102-2
About Luen Mei Company Milestones GRI 102-1; GRI 102-2
Awards and Recognitions /
ESG management system GRI 102-16; GRI 102-26; GRI 103-2
Responsibility
Materiality Issues GRI 102-44
management
Stakeholder Engagement GRI 102-40; GRI 102-43
Optimizing Corporate GRI 102-18; GRI 102-22; GRI 102-26;
Governance GRI102-32; GRI 103-2
Ensuring Integrity and
Creating GRI 103-2; GRI 205-2
Compliance
Sustainable
GRI 403-1; GRI 403-2; GRI 403-3; GRI
Values Managing Safety Strictly
403-6
Practicing Responsible
GRI 204-1
Procurement
Ensuring Stable Heating
GRI 103-2
Supply
Responsible
Strengthening Research
Service for GRI 416-1
and Innovation
Customers
Improving Customer
GRI 103-2; GRI 413-2
Service System
Improving the
GRI 103-2; GRI 302-1; GRI 305-1; GRI
Environmental
Green and 305-7; GRI 414-1
Management System
Environmentally
Responding to Climate
friendly GRI 103-2; GRI 302-4
Change Actively
Development
Promoting Rational
GRI 303-3; GRI 306-2
Utilization of Resources
Win-win Cooperation
/
with the Industry
Giving Back to
GRI 102-7; GRI 102-8; GRI 103-2; GRI
Society and Growing Together with
401-1; GRI 401-2; GRI 403-5; GRI
Creating a Better Employees
404-1; GRI 405-1
Future Together
Contributing to a
GRI 413-1
Harmonious Society
Lighting up High- Promoting Efficient
GRI 203-2
Speed Train Communication
Travels with Raising Public Awareness
GRI 203-1; GRI 203-2
Digital Media to Support Public Welfare
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ABOUT THIS REPORT
The Environmental, Social and Governance Report of Luen Mei Quantum Co., Ltd. is
the first ESG report issued by the Company and its subsidiaries. The report mainly
introduces the Company’s performance and progress in the economic, environmental,
social and governance aspects, and responds to the concerns of its stakeholders. The
report is prepared annually.
Report Boundary: The content of this report covers Luen Mei Holding and its
subsidiaries, including:
Shenyang Hunnan Heat-supplying Co., Ltd.
Shenyang Xinbei Thermoelectric Co., Ltd.
Guohui New Eco-energy Co., Ltd.
Shenyang Guoxin New Eco-energy Co., Ltd.
Jiangsu Luen Mei Bioenergy Co., Ltd.
Shenyang Guorun Low-carbon Thermal Power Co., Ltd.
Mega-info Media Advertising Co., Ltd.
Shenyang Shenshuiwan Clean Energy Co., Ltd.
Lianzhong New Energy Co., Ltd.
366 Mobile Internet Technology Co., Ltd.
Shenyang Huaxin Luen Mei Asset Management Co., Ltd.
Time Period: The report covers content from the time the Company was founded to
December 31, 2019, with certain contents beyond the above time period to ensure the
continuity of the report.
Reporting Standards: The report is compiled according to the GRI Standards issued
by GSSB. For the disclosure of various indicators in this report, please refer to the
GRI Standards Content Index section in this report.
Information and Data Disclosure: The materials and data used in the preparation of
this report are from the Company’s 2019 Annual Report, relevant company policies
and cases of outstanding social responsibility practices, as well as the qualitative and
quantitative information collected based on the reporting framework.
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Report Accessibility: The electronic version of this report is released in Chinese and
English. The electronic version can be downloaded and accessed through the website
of the Shanghai Stock Exchange (http://www.sse.com.cn/).
Feedback
Should you have any questions or comments regarding the report, please contact us
through the following ways:
Address: No. 1, Yuanhang Middle Road, Hunnan New District, Shenyang
Postcode: 110168
Telephone: 024-23784835
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