APP China
Sustainability/ESG Report
Live Together, Thrive Together,
Towards Greater Mutual Prosperity

Live together with nature,
thrive together with all beings

Stand on the new starting point of the 30th

anniversary, forge ahead with greater resolve toa new journey

100
42

Performance in Numbers

Environmental: Creating a Picture of Green
Development

12

Sustainable Forest Management

Sustainability/ESG Strategy

02
Strategy Implementation Process

Message from Chairman

Sustainability Certification
Stakeholder Engagement

04

Materiality Assessment

12
14
15
18

Managing Environmental Footprint of
Operations

44
48

107
Assurance Statement

111
GRI Standards (2021) Content Index

58
Social: Adhering to the Original Aspirationof Shared and Win-win Development

114

About APP China

TCFD Index
Company Profile

Organizational Chart
Milestones

Achievements and Honors

04

20

05

Annual Focus: Protecting Our Home Planet

08

Practicing Circular Economy and Exploring
Innovative Development Models

21

Protecting Biodiversity and Promoting Harmony
between Humanity and Nature

37

06

Steadily Promoting Low-carbon Transformation
to Address Climate Change

29

Employee Development and Cultivation

60

Product Responsibility

71

Health and Safety

Customer Relationship Management

Charity and Philanthropy and Community
Engagement

65
73
75

80
Economic and Governance: Building a Solid
Foundation for Sustainable Development

Digital and Intelligent Transformation

82

Risk Management

92

R&D and Innovation

Business Integrity and Ethics
Supply Chain Management

88
94
98

114
UN Global Compact Ten Principles Index

APP China Sustainability/ESG Report 2022

Message from Chairman

Message from Chairman

We regard the implementation of the green
development concept as a key responsibility as acorporate citizen of our planet. APP China has included
green transformation as a core strategic direction of theCompany and strives to strengthen its green and low-

carbon management and innovation with a whole industry
chain perspective. In 2022, we set the overall targets ofcarbon peaking by 2030 and carbon neutrality by 2050. Our

industry mode will continue to play an important role inour carbon reduction strategy. As shown in the national

Carbon Peak Implementation Plan in the Industrial Field ,for the paper industry, the Integration of Plantation-PulpPaper industry mode is an important way to promote theindustry's low-carbon coordinated development. We willcontinue to expand the area of plantations and carry out
forest management work with strict sustainable forest

management standards to ensure that forest land obtains
good economic, social and ecological benefits with ourthe high-quality development of China's paper industry with strong entrepreneurism, from theinitial introduction of the "Integration of Plantation-Pulp-Paper" development model to the current

implementation of its green transformation strategy and digital and intelligent transformation strategy,
aiming at promoting the symbiotic growth with the motherland and mutual prosperity with society.

Taking our "30th anniversary" as a milestone, we take the opportunity to not only reflect on where wecame from, but also, more importantly, strategize our future development path in the context of the

new era. Over the past three decades, China has experienced rapid economic and social development
and entered a stage of high-quality development. During this period, China is not only adopting a

different development mode, but also assuming greater responsibilities in the world as a great power.
The report of the 20th National Congress of the Communist Party of China has set the direction for
China's development with the five Chinese paths to modernization, including "the modernizationof harmony between humanity and nature", "the modernization of material and cultural-ethicaladvancement", and "the modernization of common prosperity for all", etc., which also have a profound
impact on the development patterns of enterprises.

02

continuous capacity building and career development of

our employees, allowing them to fulfill their career dreams
at APP China.

the poor, and strengthening social stability andOur hallmark "Integration of Plantation-Pulp-Paper""promoting national development with industrial development", APP China is committed to assistinglaunch customized training programs to support theachievements in the fields such as forest carbon sinks,
and development of new low-carbon technologies.

the motherland and has been deeply rooted in China over these thirty years. Adhering to the ideal ofrecognized by employees. Meanwhile, we continue to

We regard "conducive to optimizing the social

biomass energy utilization, and independent researchenterprise founded by overseas Chinese, APP China is firmly connected with the development ofdevelopment path of technical talents, which was well

various business units took active measures to implement
carbon reduction programs, and have made a series of

In 2022, we ushered in the 30th anniversary of Sinar Mas Group (APP)'s entry into China. As an

mechanism at the group level and broadened thestructure, narrowing the gap between the rich andharmony" as one of key operating principles of theCompany. As of the end of 2022, we had donated nearly

RMB1.3 billion in China, supported various disaster relief
efforts and public events, and carried out a numberof long-term public welfare programs in areas such as

education support, youth development, and scientificresearch. In 2022, we added rural revitalization as a

new pillar of our public welfare efforts, and carried out

pilot programs in supporting development of specialty
agriculture and helping farmers' grow income, making

positive contribution to China's national goal of "common
prosperity".

plantation operations.

The virtuous shall have a broad path, and the self-reliant

We regard talent as the core force driving behind ourcarrying forward the Chinese papermaking civilization

innovation and development. Taking digital intelligenceas an example, APP China has successfully developed

the Digital Intelligence 1.0 platform with the joint efforts
of all employees, realizing whole-process and real-time
digitalized management and monitoring of operations
ranging from production, sales, logistics, and finallyto customer service. During the next 2.0 stage, we willcontinue to work on factory automation and management
process visualization, which creates greater demand for

digital intelligence talents. Therefore, we plan to not only

shall have divine assistance. Bearing in mind the ideal ofand serving the country with industrial development, APP
China will continue to exert our spirit of self-improvementin the new journey of the next 30 years and even 100 years,
strengthen innovation and development, deepen green
and digital and intelligent transformation, actively alignour development strategy with the national strategic goals,
and stride through the many uncertainties globally withgreat confidence, making continuous contribution to themodernization of China.

provide our employees with extensive capacity building

support but also provide them plenty room to fully realize
their potential. Besides, we have also intensified our

research and development in the fields of sapling breeding
and cultivation, product development, new technology
application, and equipment transformation andupgrading, achieving both cost advantages and the scale

application of technologies. In 2022, we comprehensively

Chairman of Sinar Mas Group
Teguh Ganda Widjaja

promoted the "dual-channel" career development

03

APP China Sustainability/ESG Report 2022

About APP China

About APP China
Company Profile

Organizational Chart

Sinar Mas Group was founded by the prominent

China had total assets totaling RMB244.5

In terms of brands, APP China has many

1938, with investments spanning continents

employees.

household paper brand "Breeze" andIndonesian Chinese Mr. Eka Tjipta Widjaja inlike Asia, North and South America, Europe,

billion and approximately 26,000 full-timeand Oceania today. The Group has built

APP's investment in China can be traced

Services, Agri-Business & Food, Real Estate,

the Company has been committed to aseven business pillars: Pulp & Paper, Financial
Energy & Infrastructure, Telecommunications,and Healthcare.

Asia Pulp & Paper Co., Ltd. (APP), a pulp andpaper subsidiary of Sinar Mas Group, wasfounded in 1972 and has grown into a world
leader in papermaking industry. APP has

dozens of pulp and paper companies andover one million hectares of fast-growing

plantations in Indonesia, China, etc. APP's

products and business spread to more than160 countries, with businesses ranging fromplantations and pulp to industrial paper,

cultural paper, tissues, and various types ofback to 1992. For more than 30 years,

sustainable development strategy andpracticed the green and circular economy

of money to lay out large-scale pulp andpaper enterprises of world-leading level,
represented by Ningbo Asia, Gold East

Paper, Hainan Jinhai Pulp & Paper, Guangxi
Jingui Pulp & Paper and Bohui Paper, andinvested 286,000 hectares of modern fastgrowing plantations.

Forestry Business Unit, Pulp Business Unit,

which is the leader of pulp and paper"TOPGUN" , etc.

functional units within the Company such as
Paper Business Unit, and Tissue Business

Unit, and is widely involved in chemical, realestate, paper equipment, etc. In 2022, APP
China's sales revenue in China was aboutdevelopment of sustainable urban

the allocation of resources. To date, theBoard ofDirectors

Company has developed two large-scaleurban complexes in Shanghai: the Sinar Mas
Plaza and the Shanghai Arch.

As of the end of 2022, APP China had:
Products marketed in over

160 countries/regions

Management
Committee

Decision-making
Committee

across six continents

Price
Committee

RMB94.3 billion in annual
sales revenue
New Project Base

Real Estate Business Unit

Tissue Business Unit

Paper Business Unit

Cultural Paper

Industrial Paper

04

Personnel Review
Committee

Corporate
Headquarters

RMB244.5 billion in total
assetsPulp Business Unit

RMB94.3 billion.

Supervisor

Forestry Business Unit

industry in China. As of the end of 2022, APP

the office paper brand "Gold Flagship" andcomplexes and technology parks to diversify

APP's regional headquarters in China – Sinar
are collectively referred to as "APP China",

industrial paper brand "Jinli" and "Siji Gui",on the Yangtze River Delta and South China.
The Company has invested a huge amount

Shareholder
Meeting"Space Shuttle" and "Whale King", the

APP China actively promotes the

Plantation-Pulp-Paper" approach, focusing

Currently, APP China has set up multiple

its subsidiaries or other affiliated enterprises"VIRJOY", the popular cultural paper brandby operationalizing the "Integration of

paper products. APP entered China in 1992.
Mas Paper (China) Investment Co., Ltd. - andwell-known trademarks, such as the05

APP China Sustainability/ESG Report 2022

About APP China

Milestones
2020

2022

of Shandong Bohui Group's

anniversary of entering China,

Sinar Mas Paper acquired 100%

2010

With an annual chemi-mechanical pulp (CMP)

production of 300,000 tons, the1998

Yalong Paper Products (Kunshan)Co., Ltd. started operations; withan annual paper product capacityof 200,000 tons, it was once one of
the largest paper deep-processing
enterprises in China.

Gold Hongye Paper Group Co., Ltd.

first phase of Guangxi Jingui
Pulp & Paper's "Integrationof Plantation-Pulp-Paper"project started operations, andits 600,000-ton papermaking
production also started
operations.

started operations, activating 23

1996

Gold Huasheng Paper(Suzhou Industrial Park)

Co., Ltd. was established,
and was once one of thelargest diversified cultural

paper product providers in
China and Asia.

equity, optimizing corporate

scale and resource allocation,and promoting orderly

competition and high-quality
development in China's pulp
and paper industry.

The foundation stone laying

at the 5th China International
Import Expo.

Park, Yancheng, Jiangsu
Province.

fully automated assembly lines

simultaneously; it currently has anannual capacity of over 1.2 million

2021

800,000 tons of finished products,

Tissue Base started operations

tons of tissue base paper and over

The Sinar Mas - APP Rudong

and its brands such as "Breeze" andwith a total investment of RMB45"VIRJOY" have become industry-billion, a planned site area ofleading tissue brands.

567 hectares, and an annual

high-grade tissue production

capacity of 3.96 million tons. It
was divided into three phasesof construction, and the firstphase of the project has been
fully completed and put into
production currently.

China, embarking
on a progressive

2017

journey to

APP China actively responded

modernize

to the "Belt and Road" Initiative

papermaking in theand signed a strategic agreement

country.

with several cities to build large-

scale production and R&D bases

2004

Ningbo Zhonghua was formed

Ningbo Asia Pulp & Paper was

through joint investment by APP,

put into operation, equipped

China Strategic Holdings Limitedwith one of the world's largest

and Pulp Import and Export Co.,1997

in and set up by APP in China.

established with a total

Gold East Paper was officiallyinvestment of RMB20 billion;
with an annual production

capacity of 2 million tons ofcoated paper, it is one of theworld's largest single-line coatedpaper enterprises.

06

released the first ESG report

held at the Binhai Port Industrial

plantations in

Ltd. and is the first mill invested

its sustainability strategy andIntegration Industrial Base wasto establish

Board Factory, and China Paper

ESG development concept into

Group Yancheng Cellulose Fiber

APP started

from Hong Kong, Ningbo Duplex

the Company integrated an

ceremony of the Sinar Mas

1995

1992

On the occasion of its 30th

single-machine production
capacities and the mostadvanced industrial paperboard
production lines.

2005

Hainan Jinhai Pulp & Paper Co.,
Ltd., APP China's first pulp mill,officially started operations.

for tissues, industrial paper, andviscose fiber using "Industry
4.0 + artificial intelligence"technologies.

APP China Sustainability/ESG Report 2022

About APP China

Achievements and Honors
Receiver

Honors and Awards
2021 Green Exemplary Annual Award

APP China

The Fourth Outstanding Overseas Chinese-fundedEnterprises in Jiangsu Province2022 ESG Practice Model Award
2022 Responsible Enterprise

HONOUR 2022 Enterprises Contributing to Sustainable
Development
2021 Outstanding Enterprises Contribution to Hainan
Science and Technology Industry Development
2022 Outstanding Unit of Emergency Management
Donation with Love, and Care for Communities

Hainan Jinhai
Pulp & Paper

2022 Top 100 Enterprises in Hainan Province (No. 15),2022 Top 40 Enterprises of Manufacturing Industry in
Hainan Province (No. 4)

The 11th Finance Summit Sustainable Business Conference·2022

2022 Leading Green Development Enterprises in Jiangsu
Province
2022 Advanced Unit for China Light Industry Digital
Transformation

2021 Outstanding Labor Relations and Harmonious
Enterprise in Jiangsu Province2021 Top 10 Enterprises for Tax Contributions inZhenjiang New Area

Gold EastPaper

The Fourth Qinzhou Mayor Quality Award

2021 Top 30 National Key Papermakers for Output

Guangxi Pilot Enterprises for RCEP Promotion and
Implementation

Guangxi Jingui
Pulp & Paper

Administration Office of Ministry of Industry and Information
Technology

Jiangsu Provincial Water Resources Department, Jiangsu
Development & Reform Commission, Industry and Information
Technology Department of Jiangsu, Department of Finance of
Jiangsu Province, Jiangsu Provincial Department of Housing
and Urban-Rural Development, Jiangsu Provincial Market
Supervision Administration, Jiangsu Provincial Government Offices
Administration

Tripartite Committee for Coordinating Labor Relations of Jiangsu
Province
CPC Zhenjiang New Area Work Committee, Zhenjiang New Area
Management Committee

China Enterprise Confederation

Ministry of Industry and Information Technology

Industry and Information Technology Department of Guangxi
Zhuang Autonomous Region
Qinzhou Municipal People's Government
China Paper Association

Guangxi Council for the Promotion of International TradeTop 20 Paper Enterprises in China

China Pulp and Paper Industry Magazines Publisher

Demonstration Enterprises for Quality Improvement inGuangxi

Market Supervision Administration of Guangxi Zhuang Autonomous
RegionSecond Prize of Best Practice on Applying RCEP
Agreement on Market Expansion by Guangxi's Local
Enterprises

Department of Commerce of Guangxi Autonomous Region,
Department of Industry and Information Technology of Guangxi
Autonomous Region, Nanning Customs District P.R.China, Guangxi
Council for the Promotion of International Trade
People's Government of Guangxi Zhuang Autonomous Region

2022 Pilot Enterprises of Industrial Wastewater Recycle
and Reuse

Administration Office of Ministry of Industry and Information
Technology

Top 100 High-Tech Enterprises in Guangxi

Guangxi Zhuang Autonomous Region Science and Technology
Information Research Institute, Guangxi High-tech Enterprise
Association

2021 Top 50 Tax Contributors of Ningbo's Manufacturing
Industry
Ningbo Asia

China Pulp and Paper Industry Magazines Publisher

China National Light Industry Council, China Paper Association

2021 "Contract Abiding and Trustworthy" Enterprise of
Guangxi

Department of Ecology and Environment of Jiangsu Province,
Federation of Industry and Commerce of Jiangsu Province

The Printing Technology Association of China

Top 10 Papermaking Enterprises of China's Light
Industry

Nomination Award for the 6th Guangxi Zhuang
Autonomous Region Chairman Quality Award

China National Light Industry Council, China Paper Association

China National Light Industry Council

Ministry of Industry and Information Technology of the People's
Republic of China

2021 Stepping Up Industrial Enterprises above
Designated Size

Hainan Enterprise Confederation, Hainan Entrepreneur Association

Jiangsu Provincial Enterprise Federation

2022 Pilot Enterprises of Industrial Wastewater Recycle
and Reuse

Products of Green Raw & Auxiliary Materials

National "Green Factory"

Ganchong Work Committee of Danzhou Municipal Committee of
CPC, Ganchong Office of Danzhou Municipal People's Government

CPC Zhenjiang Municipal Committee, Zhenjiang Municipal People's
Government

China Environmental United Certification Center (CEC)

Top 500 Enterprises of China's Manufacturing Industry

Yangpu Economic Development Zone Management Committee

Issuers2022 Green Front-runner Enterprises

2022 Top 20 Paper Enterprises in China

Hainan Science and Technology Enterprise Federation, Hainan
Science and Technology Industry Federation Trade Union
Committee, Hainan Sina Internet Information Service Co., Ltd.

Hainan Provicial Survey Organization of National Bureau of Statisticsof China

2021 Top 10 Papermaking Enterprises in China's Light
Industry, Top 200 Enterprises in China's Light Industry

2022 Top 100 Enterprises in Jiangsu, 2022 Top 100
Manufacturing Enterprises in Jiangsu

The 5th Social Responsibility Conference

Federation of Industry and Commerce of Hainan Province, Scienceand Technology Department of Hainan Province

Honors and Awards
2021 Golden Mountain Award

The 18th China Corporate Social Responsibility Forum2022 Outstanding Enterprises Based on Survey ofPurchasing Managers

The Third Batch of "Water Efficiency Front-runner" in
Jiangsu Province

08

The Federation Of Jiangsu Returned Overseas Chinese, Departmentof Commerce of Jiangsu Province, Jiangsu Provincial Tax Service,
China Council for the Promotion of International Trade Jiangsu
Sub-council, Jiangsu Chamber of International Commerce, Jiangsu
Overseas Chinese Enterprise Federation

Federation of Industry and Commerce of Hainan Province2022 Pilot Enterprises of Industrial Wastewater Recycle
and Reuse

ReceiverThe 11th Public Welfare Festival and Corporate Social Responsibility
Carnival

2022 Top 50 Private Enterprises in Hainan Province(No. 3)2022 Top 20 Private Enterprises in Hainan Province for
R&D Investment (No. 3)Gold East
Paper

Issuers2021 First Batch of "Zero Waste City Cells" in Ningbo
2022 Qualification for Beilun District Science
Popularization Base

2021 Five-Star Enterprise for Business Management
Innovation and Improvement in Ningbo

Market Supervision Administration of Guangxi Zhuang Autonomous
RegionNingbo Municipal People's Government
Ningbo Office of the Leading Group for Building a Beautiful Ningbo
Beilun District Association for Science and Technology of Ningbo
Ningbo Municipal Economic and Information Technology Bureau

09

APP China Sustainability/ESG Report 2022

Receiver

Honors and Awards
Top 10 Papermaking Enterprises of China's Light
Industry (No. 8)

Ningbo Asia

2022 Advanced Unit for Digital Transformation in China'sLight Industry

China National Light Industry Council

2022 National Intellectual Property Advantage
Enterprises

China Pulp and Paper Industry Magazines Publisher
China National Intellectual Property Administration
All-China Federation of Industry and Commerce

AAA Grade Enterprise Credit Certificate

Shandong Enterprise Confederation, Shandong Federation ofIndustrial Economics

2022 Smart-manufacturing Demonstration Plants ofShandong Province, Shandong Provincial Industrial
Internet Benchmarking Factory
2022 Top 100 Private Enterprises in Shandong, 2022
Top 100 Private Enterprises in Shandong in Terms of
Employment Absorption

Federation of Industry and Commerce of Shandong Province2022 Shandong Famous Brands & Products

Shandong Council for Brand Development

2022 "One Enterprise, One Technology" R&D Center for
Industrial Enterprise, Zibo City

Zibo Engineering Research Center for New Materials forPapermaking
Qualification for "Self-evaluation of Enterprise Skilled
Talents"
Jiangsu Provincial "Green Factory", Smart-manufacturing Demonstration Plants of Jiangsu
Province

Postgraduate Research Station in Jiangsu Province2021 Five-star Enterprise of Star-ExcellenceHigh-tech Products Recoganition, Yancheng Engineeringand Technology Research Center Recognition
2021 Tax Contribution Award over RMB100 Million

Shandong Development and Reform Commission
Zibo Industry and Information Technology Bureau
Zibo Development and Reform Commission
Zibo Public Employment and Talent Service CenterIndustry and Information Technology Department of Jiangsu
Jiangsu Education Department and Jiangsu Provincial Departmentof Science and Technology

Issuers2021 Annual Outstanding Economic Contribution Award– Top 30 Headquarters Economies

CPC Suzhou Industrial Park Work Committee, Suzhou Industrial Park
Management Committee

Hainan Gold
HongyeHainan Gold
Shengpu

Rudong BaseAPP China
Forestry

China Association for Quality Inspection

2022 Annual Craftsmanship Product in China Tissue
Industry ("Breeze")

China Technical Association of Paper Industry

2022 Most Influential Green Enterprise Brand ("Breeze")

Xinhuanet

2022 Green Model Award for Tissue Industry

2022 International Green Zero-Carbon Festival

2022 TBI Brand of the Year Household Cleaning andChemical Industry (Gold Hongye Paper), 2022 TBI BestESG Brand (VIRJOY), 2022 TBI Best Environmentally
Friendly Sustainable Product (VIRJOY)TBI Organizing Committee

The 6th DMAA International Digital Marketing Award
Gold Prize ("The Breeze Exploration Journey")

Department of Industry and Information Technology of Shandong
Province

Shandong Association of Plant Engineering

Shandong Enterprise Technology Center

Gold Hongye
Paper

Shandong Paper Association

First Prize of "Lean Management Capability Six Aspectsof Improvement - Lean Site Management Achievement
Competition", Advanced (Three-star) Unit of Shandong
Province for Equipment Management

Honors and Awards

National Model Enterprise for Trustworthy Productand Service Quality, Stable and Qualified Products in
National Quality Inspection, National Quality Credit
Guaranteed Products for Consumers, National Leading
Brand of Product and Service Quality Integrity, TopQualify Brand of China's Tissue Industry, Top-Quality
Enterprise of China's Tissue Industry, China Quality
Credit Model Enterprise

Ningbo Beilun Charity Federation

2022 Top 500 Private Enterprises in R&D Investment,
China Top 500 Private Manufacturing Enterprises
2021 Top 10 Enterprises

ReceiverChina National Light Industry Council, China Paper Association
Ningbo Enterprises Confederation, Ningbo Entrepreneur Association,
Ningbo Federation of Industrial Economics

2022 Top 20 Paper Enterprises in China

10

Issuers2022 Top 100 Competitive Enterprises in Ningbo (No. 50),2022 Top 100 Manufacturing Enterprises in Ningbo (No.
29), 2022 Top 100 Comprehensive Enterprises in Ningbo(No. 48), Top 100 Fastest-growing Enterprises in Zhejiang
Province
Charity Model in Beilun District

Bohui Paper

About APP China

The 6th DMAA International Digital Marketing Summit

The 29th China International Advertising Festival
Integrated Marketing Award ("The Breeze Exploration
Journey")

Advertiser Ceremony Organizing Committee

National "Green Factory" (Gold Hongye Hubei Mill)

Ministry of Industry and Information Technology

Like 2022 My Favorite Chinese Brand (Breeze)

China National Brand

2022 Top 100 Enterprises in Hainan Province (No. 39),2022 Top 40 Enterprises of Hainan Manufacturing
Industry (No. 9)

Hainan Entreprises Federation, Hainan Entrepreneurs Association

Outstanding Unit for Energy Conservation and Emission
Reduction
Pioneer Unit for Energy Conservation and Emission
Reduction

2021 Major Project High-Quality Construction Awardof the City – Top 10 Projects for Foreign Investment
Attraction

New Overseas Chinese Innovation and Entrepreneurship
Base
Hainan Science and Technology Innovation ProjectAward
Provincial Leading Forestry Enterprises

Hainan Energy Conservation and Emission Reduction Association
Hainan Energy Conservation and Emission Reduction Association
CPC Nantong Municipal Committee, Nantong Municipal People's
Government
Jiangsu Overseas Chinese Federation
Hainan Provincial Federation of Science and Technology Enterprises,
Hainan Provincial Federation of Science and Technology Industry
Union Committee, Sina Hainan
Jiangxi Provincial Department of Forestry

Yancheng Municipal People's Government

Yancheng Science and Technology Bureau
Committee of the CPC Dafeng District and People's Governmentof Dafeng District, Yancheng City

11

APP China Sustainability/ESG Report 2022

Sustainability/ESG Strategy

Sustainability/ESG Strategy
Strategy Implementation Process
APP's "Sustainability Roadmap: Vision 2030" ("SRV 2030") focuses

the lives of millions". Based on these, APP China formulated its own

conservation, and community development, with three overall goals

2022, we formulated the APP China Carbon Peaking and Carbon

on three core issues - energy saving and emission reduction, forest
respectively, which are "30% reduction in carbon footprint", "overhalf a million hectares of natural forests conserved", and "improve2030 Sustainability Strategy in 2021 based on local conditions. In
Neutrality strategic plan, making another positive progress inadvancing our sustainability strategic goals.

Progress Towards Realizing APP China 2030 Sustainability Strategic Goals
Fully advance ESG-

Contribute to APP's

Goals

Peak carbon
emissions by 2030

goal of "over halfa million hectaresof natural forests

Undertake forest

Adjust energy

carbon sink projects

structure in mills

30% reduction inContinuously

Contribute to APP's

product carbon

promote "carbon

goal of "improve thefootprint

neutral" products

lives of millions"conserved"

related practices,deliver on the threeyear ESG roadmap, andcontinuously improve
ESG performance

The formulation of

Further increased the

By the end of 2022, theWe intensified

The carbon intensity

Gold Hongye Paper

Based on extensive field

We carried out ESG

roadmap of the "carbon

286,000 hectares, a 5.7%of our plantations

photovoltaic energy andproducts decreased by

Blossom Zero-carbon

pilot rural revitalization

activities, organizing a

the implementation

Annual Progress

peaking by 2030, andcarbon neutrality by

2050" strategy is nearcompletion.

area of our plantations toincrease compared to2021.

carbon storage capacity
reached 44.84 million

tons of carbon dioxide,

which were preliminarily
identified as eligible for
VCS projects and CCER

projects. Relevant pilot

projects were planned to
be implemented in thenext two years.

the utilization of

biomass energy, andincreased the purchaseof green electricity,with our solar power

generation and biomassenergy use increased by
27.11% and 10.5% yearon-year respectively.

of our pulp and paper

7% compared to 2021.

introduced the Breeze
Floral Essence Premium
Roll Tissue, and VIRJOY
zero-carbon tissue;

Bohui Paper's whiteivory cardboard, cultural
paper, and packaging
paper products had

passed carbon neutral
certification.

research, we initiated a
project in Ganzhou,

donating and supporting
the development of anavel orange culturaland tourism industry
park to promote thedevelopment of local
specialty industries.

capacity building

series of sustainability/
ESG thematic training
at headquarters andvarious business units,
covering sustainability

trends, key ESG ratings,

ESG risk and opportunity
management, carbon

asset management, etc.

Contribution to SDGs

12

13

APP China Sustainability/ESG Report 2022

Sustainability/ESG Strategy

Sustainability Certification

Stakeholder Engagement

CFCC/PEFC-FM Certification* of APP China Forestry

We have established a regular communication mechanism with stakeholders through various channels to fully understand their expectations anddemands, and continuously refine our management measures and practices based on actual operational situations in response to key issues ofconcern of our stakeholders.

No.

APP China Forestry Companies

Certificate No.

1

Hainan Jinhua Forestry Co., Ltd.

CFCC/PEFC-FM-ZTFC-000003

3

Leizhou Jin-taiyang Science and Tech Forestry Ltd.

CFCC/PEFC-FM-ZTFC-000030

2

Heyuan Jinmei Science & Technology Forestry Co., Ltd.

4

Yangjiang Jin-taiyang Science and Tech Forestry Ltd.

5

Shaoguan Jin-Shaoguan First Quality Timberland (Paper mill) Ltd.

7

Guangxi Jin Gui Forestry Co., Ltd.

8

Guangxi Jin Qinzhou High-Yield Forestry Co., Ltd.

9

10

11

12

include the group standard for Evaluation Specification of Zero-Carbon Factory (T/CECA-G 0171-2022), the group standard of Enterprise ESG

Evaluation System (T/CERDS 3-2022), the national standard of Tissue (GB/T 20808-2022), the group standard of Products with Craftsmanship——
Tissue Paper (T/CTAPI 002-2022), the national standard of Hand Towel (GB/T 24455-2022), etc.

CFCC/PEFC-FM-ZTFC-000030

Jin-Qingyuan Timberland (Paper mill) Ltd.

6

CFCC/PEFC-FM-ZTFC-000030

In 2022, APP China actively participated in the formulation of a series of national and industry standards. The standards officially released in 2022

CFCC/PEFC-FM-ZTFC-000007

CFCC/PEFC-FM-ZTFC-000008
CFCC/PEFC-FM-ZTFC-000005

CFCC/PEFC-FM-ZTFC-000006

Guangxi Xing Guilin Agriculture Technology Co., Ltd.

CFCC/PEFC-FM-ZTFC-000031

Guangxi Jin Taiyang Forestry Co., Ltd.

CFCC/PEFC-FM-ZTFC-000031

Wenshan Jin Wenshan High-Yield Forestry Co., Ltd.

CFCC/PEFC-FM-ZTFC-000017

Simao Jin Lancang High-Yield Forestry Co., Ltd.

*CFCC/PEFC-FM certification refers to CFCC/PEFC Forest Management certification.

CFCC/PEFC-FM-ZTFC-000018

Co-hosting the 11th China Paper Industry Sustainable Development Forum
From September 16 to 18, 2022, APP China co-hosted the China

from enterprises and media participated in-person or online in

Mas Group APP China's 30th Anniversary Celebration in Ningbo,

quality Development of China's Paper Industry in the Context ofPaper Industry ESG Development Strategy Forum and Sinar

in collaboration with China National Pulp and Paper ResearchInstitute, China Technical Association of Paper Industry (CTAPI),
and China Pulp and Paper Magazines Publisher. It has been

the 11th annual series of events of the China Paper Industry

Sustainable Development Forum initiated by APP China since2008. More than 100 industry experts, scholars, and representatives

a number of discussions and forums on topics such as "High-

China's Carbon Peaking and Carbon Neutrality Goals", "Digital

Transformation and Upgrading of the Paper Industry", "Industry-

University-Research Cooperation Model in the Paper Industry", "ESG

Development at Paper Enterprises", "ESG Investment and Corporate
Carbon Asset Rating", and "ESG Investment and Corporate Value".

2022 Main Sustainability Management System Certification Audit Statusat Mills of APP China
ISO9001

ISO14001

ISO45001

ISO50001

CFCC/PEFC-CoC*Gold East Paper

Periodic audit

Re-certificate audit

Re-certificate audit

Periodic audit

Re-certificate audit

Hainan Jinhai Pulp & Paper

Periodic audit

Periodic audit

Periodic audit

Periodic audit

Periodic audit

Ningbo Asia

Guangxi Jingui Pulp & Paper

Shandong Base of Bohui Paper
Jiangsu Base of Bohui Paper
Rudong Base

Periodic audit

Periodic audit

Periodic audit

Re-certificate audit
Periodic audit

Periodic audit

Periodic audit

Periodic audit
Initial audit

Initial audit*CFCC/PEFC-CoC certification refers to CFCC/PEFC Chain of Custody certification.

14

Periodic audit

Periodic audit

Periodic audit
Initial audit

Initial audit--

Periodic audit

Re-certificate audit
Initial audit

Re-certificate audit

Re-certificate audit
Periodic audit

Periodic audit

Periodic audit

Site of "the China Paper Industry ESG Development Strategy Forum and Sinar Mas Group APP China's 30th Anniversary Celebration"

15

APP China Sustainability/ESG Report 2022

Stakeholders

Employees

Customers andconsumers

Suppliers/
Contractors

Sustainability/ESG Strategy

Top Concerns

・ Product quality
and safety
・ Occupational
health and safety
・ Water resourcesmanagement

・ Business ethics
・ Economic
performance

・ Company internalmagazine
・ APP Culture Voice platform・ Employee representative
meetings
・ Employee communication
meetings
・ Executive mailbox
・ MBOS proposal
competition

・ Sunshine Integrity Month・ Training activities on
different topics
・ Diversified employee
activities
・ Sustainability reports
・ WeChat Official Account・ Integrity and compliancewhistleblowing channel

・ Customer service
hotline/mail・ Company website
・ Sustainability reports
・ WeChat Official
Account

・ Product quality
and safety
・ Business ethics
・ Economic
performance

・ Customer
relationshipmanagement
・ Circular economy

・ Customer visits
・ Engagement meetings
・ Little A Classroom
・ Industry conferences/
events・ Customer satisfaction
surveys・ Product quality

・ Economic

・ Business ethics

・ Water resources

・ Supplier/Contractor
・ Sustainability reports
meetings
・ Supplier performance・ Supplier/Contractor training
evaluation
・ Cooperative R&D
・ Integrity and compliancemechanism
whistleblowing channel
・ Regular supervision andinspection

and safety

・ Customer

relationshipperformance

management

management

Banks

Engagement Channels

・ Economic performance ・ Energy

・ Daily communication

・ Customer relationship・ Circular economy

・ Cooperative agreement

・ Environmental

・ Water resources

・ Government

・ Thematic training

compliance・ Business ethics

・ Government inspections

・ Awards and recognition

・ Business ethics
management

management

meetings

・ Sustainability reports

Stakeholders

Community
representatives

・ Air pollutant emissions
・ Climate action

16

management

communication meetings
and field visits

・ Information disclosureand reporting・ Sustainability reports
・ Company website

・ Business ethics

・ Customer

・ Community representatives' ・ Papermaking culture

safetyrelationshipmanagement

and cultural

・ Economic

・ Digital and・ R&D and innovation

intelligent

transformation

Professional
institutions

performance・ Business ethics

・ Circular economy

・ Industrial exhibitions,seminars, and thematicforums・ Regular visits

・ Awards and recognition

volunteer activities

popularization activities

・ Community

representatives training
and communication

・ Collaborate to develop
industry standards

・ Industry publications

・ Sustainability reports

・ Research and cooperation

・ Sustainable forest

・ Industry-University-

・ Training activities

・ Air pollutant

・ Circular economy

・ Joint talent cultivation

・ Sustainability reports

management

management

・ Water resources

Research Cooperation

・ Professional exchange
and on-site research

management

Media・ WeChat communication

・ Charitable activities and・ Energy

emissionsNGOssupervision and engagement

・ Mill visits

・ Project cooperation

・ Product quality
and safety

processing and feedback

platform

communication

・ Company website

・ Regular visits

・ Community opinion

・ Community relations

management

management and・ Product quality andperformanceand safety

Industry
associations

Engagement Channels

・ Economic

・ Occupational health・ Information security

Government
agencies

Top Concerns

・ Company website

・ Biodiversity monitoring

activities

・ Environmental
management andcompliance・ Water resourcesmanagement
・ Sustainable forest
management

・ Climate action
・ Philanthropy andcommon prosperity
・ Business ethics

・ Communication on specific ・ Sustainability reports
topics・ Company website
・ Charity projects donation
・ WeChat Official Accountand cooperation
・ Regular visits

・ Circular economy

・ Product quality and・ On-site participation in・ WeChat Official Accountintelligent

・ Information security

・ Meetings, exhibitions,・ Cooperation on publicity

・ Water resources

・ Risk and compliance・ Company website

・ Digital andtransformation
management

safetymanagement
management

eventsforums, etc.

・ Executive interviews
activities

・ Sustainability reports

17

APP China Sustainability/ESG Report 2022

Sustainability/ESG Strategy

Materiality Assessment
In 2022, 26 sustainability/ESG issues closely related to APP China were identified based on the Company's development focuses and with reference

to the GRI Standards, the SASB Standards for Pulp & Paper Products and Forest Management, latest national and industry policies, and major global
ESG rating systems such as the S&P Corporate Sustainability Assessment (CSA). Two new issues were added this year, namely "Circular economy"and "Information security management". The content of some other issues were polished to better align with our operational priorities.

A total of 1,668 valid responses to materiality issue surveys were collected through the issuance of online questionnaires this year. According to
the survey results and opinions from internal and external experts, we ranked the issues based on their importance ratings and developed themateriality matrix.

High

26

10

12
06

20
Significance to stakeholders

13

21

05

01

03

23

19

24

18
16

25

08

22

11
02
04

18

Customer relationship management

21

Digital and intelligent transformation

01

Environmental management andcompliance24

Risk and compliance management

02

Climate action

23

Corporate governance04

Air pollutant emissions

14

Employee training and development

09

Circular economy

07

Sustainable forest management

03

Energy management

22

R&D and innovation

19

Information security management

08

Biodiversity

05

Waste management

15

Employment relations

13

Human rights

25

Responsible supply chain

14

07

15

Significance to APP China

Mediummateriality
issues

09

17

Low

11

High

High

Low

materiality

materiality

issuesissues10

Product quality and safety

18

Cooperation and development

26

Business ethics

16

Philanthropy and common prosperity

12

Occupational health and safety

17

Community relations and culturalcommunication

06

Water resources management

20

Economic performance

19

APP China Sustainability/ESG Report 2022

Annual Focus:
Protecting Our Home
PlanetIn January 2023, the World Economic Forum released its latest Global Risks Report .
Among the top ten global risks listed in the report, there are five risks are related to theecological environment, including the failure to mitigate and adapt to climate change,
natural disasters, loss of biodiversity, and environmental degradation. Without positive
actions for change, the accumulation of these risk factors will exacerbate the collapseof the ecosystems on Earth and pose a serious threat to all life on our planet. "Only One

Annual Focus: Protecting Our Home Planet

Practicing Circular
Economy and Exploring
Innovative Development
ModelsSteadily Promoting Lowcarbon Transformation
to Address Climate
ChangeProtecting Biodiversity
and Promoting Harmony
between Humanity andNature21

29

Practicing Circular Economy
and Exploring Innovative
Development Models

37

Sustainability Trends

Earth" is the campaign slogan of World Environmental Day 2022. These three simple
words spell out the warning to human society and the expectations for us to takecollective actions.

Traditional economy, as a one-way economy mainly based on the model of "resources-products-waste", is characterized by low

resource utilization rate and high emissions. Compared with traditional economy, circular economy attaches greater importanceto the efficient and sustainable use of resources and energy, and helps prevent pollution from the source, playing a positive role inachieving win-win economic and environmental benefits.

China's economy has transitioned from a phase of high-speed growth to a phase of high-quality development. Circular economy
is an inevitable choice to accelerate the transformation of economic development mode and achieve high-quality development,
and it has become a major strategic initiative for China's economic and social development. The 14th Five-Year Plan for theDevelopment of Circular Economy (referred to as the "Plan") issued by the National Development and Reform Commission clarifies
the goals of circular economy by 2025 and proposes three key tasks: building a resource recycling industrial system and improving
resource utilization efficiency; constructing a system for the recycling and utilization of waste materials and building a resource

recycling society; and deepening the development of circular economy in agricultural fields and establishing a circular agricultural
production mode.

Circular economy is not a new concept for Chinese enterprises. In recent years, the principle of "reduce, reuse, and recycle" hasbeen increasingly integrated into the production stages of a growing number of enterprises, producing numerous exemplary

circular economy practices. In the context of the "dual carbon" goal and the "Plan", circular economy has particular importancefor enterprises. Enterprises can develop their own circular economy models based on their specific conditions, such as developing

green products, reusing resources, and utilizing biomass energy. This approach optimizes the layout and management of the entire
industry chain, forms more rational resource flows along the industrial value chain and achieves more synergetic development.

Modern papermaking enterprises have typical characteristics of circular economy in terms of raw material utilization, low carbon

emissions, and recycling and reuse. For example, the raw materials for papermaking mainly come from plants, which fix carbon in

the form of organic matter through photosynthesis by absorbing carbon dioxide and water. The black liquid, waste residue, sludge
and biogas generated in the pulping and papermaking processes can be utilized as biomass energy sources, effectively reducing

the dependence on fossil fuels. And waste paper can be recycled in papermaking, reducing the amount of primary fiber materials
needed.

In addition, by enhancing their innovation capabilities and promoting industrial optimization and upgrading, papermaking

enterprises have immense potential to build a complete circular economy system with low energy consumption, low emissions,and achieve resource and natural carbon cycle, so as to make greater contributions to China's ecological civilization construction.

20

21

APP China Sustainability/ESG Report 2022

Annual Focus: Protecting Our Home Planet

APP China's Practices
Adhering to the green circular economy concept of "Integration of Plantation-Pulp-Paper", APP China continues to explore and practice circular

Researching on the Application of Nanocellulose

cleaner production, and developing biodegradable products and biodegradable packaging materials.

In 2022, Gold Hongye Paper and China National Pulp and Paper

the safety and eco-friendly nature of the tissue paper but also

Improving the Utilization Rate of Raw Materials

Promoting Cleaner Production

project to study the application of nanocellulose in tissue paper.

the nanocellulose developed in this project can reduce the use

Researching on varieties with high pulp yield rate

Energy-saving upgrading and transformation

use of coniferous pulp without adding any additional chemicals

Reducing the use of raw materials in the product

Water resource recycling

economy models along our value chain, constantly achieving new breakthroughs in improving the utilization rate of raw materials, enhancing

Improving the utilization of raw materials

Strengthening renewable energy utilization

production process

Waste reduction and comprehensive utilization

Research Institute established an "industry-university-research"
This study adds nanocellulose modified from the company's

broadleaf pulp product back into the paper, which reduces thewhile maintaining the product specifications. It not only ensuresproject will further optimize the performance of nanocellulose
to further reduce the use of coniferous pulp.

APP China has successfully developed pulping technology forfor promoting the efficient use of forests. The quality of thewood from Yunnan. Overcoming the traditional concept that

eucalyptus and reaches the quality level close to that ofsmall-diameter wood cannot be used for pulping, this projectfocused on maximizing the use of the smaller-diameter part ofthe eucalyptus wood from Yunnan, which had great significanceConceptof coniferous pulp in tissue products by 7%. In the future, theInnovative Study on Making Chemical Pulp and Dissolved Pulp with Small-diameter Woodmaking chemical pulp and dissolved pulp with small-diameter

Green Cycle

champions the sustainable reuse of materials. Tests show thatchemical pulp produced by the project exceeds that of Hainan
Australian blue eucalyptus; and the quality of the dissolved

pulp produced reaches the first-class quality of the national
standard.

Developing Ultra-High Bulk Products
Developing Degradable Products

Application of Degradable Packaging Materials

In 2022, Guangxi Jingui Pulp & Paper successfully developed

as an example, which weights 290g/m2, 17.1% lighter thanApplication of biodegradable new materials

Research and application of degradable packaging

on light weight and high bulk technology, creating anothersame thickness, which is weighted at 350g/m2, resulting in amaterials

Research and development of new degradable
materials

Improving the Utilization
Rate of Raw Materials

an ultra-high bulk single-sided coated white cardboard based
successful case of technologies to reduce the weight ofproducts. Taking the new product with a thickness of 490μm

traditional single-sided coated white cardboard with thesignificant reduction in raw material consumption.

Wood is a key raw material for pulp and paper enterprises. The efficient use of wood equals

better protection of forest resources. APP China actively promotes the effective utilization of raw
materials through research of forward-looking technologies and their application, developing
lightweight products, and maximizing the ash content of paper.

Promoting Cleaner
Production

APP China is dedicated to integrating the conceptof circular economy into all major production links,

actively carrying out energy-saving transformation,
strengthening renewable energy utilization,water resource recycling and reuse, and waste

reduction and comprehensive utilization, so as

to build a clean, low-carbon, and circular green

Pulp Cooking Project
APP China Forestry and Hainan Jinhai Pulp & Paper have been

several high-performing varieties with higher pulp yield rate,

pulp cooking performance of different varieties to explore aareas based on comparison of the pulp yield rates by studying

collaborating in recent years to conduct research related to thesynergistic way to find better eucalyptus varieties with balanced
improvement in both yield and quality. Using wood with a highpulp yield rate can reduce the consumption of forest resources
and the use of water, chemicals, and other resources in the

production process. It is a beneficial practice for energy saving
and emission reduction from the perspective of "Integrationof Plantation-Pulp-Paper". In 2022, the project screened out

22higher density, and higher whiteness for growing in greaterand evaluating the pulping performance of wood from different
regions, different terrain conditions, and different varieties. In

the future, APP China Forestry and Hainan Jinhai Pulp & Paper

will continue to carry out this research to support the cultivationand planting of high pulp yield varieties, and continuously

promote the conservation and efficient utilization of resources.

manufacturing system.

Ningbo Asia, Guangxi Jingui Pulp & Paper, Gold

East Paper, Hainan Jinhai Pulp & Paper, and Gold
Hongye Hubei mill have been recognized as

National Green Factories. Hainan Jinhai Pulp &Paper, Guangxi Jingui Pulp & Paper, and Gold East

Paper have been included in the national "2022 Key
Water-Using Enterprises and Park Water Efficiency
Front-runner" list. Ningbo Asia was included in

the list of the first batch of "Zero Waste Factory" in
Ningbo in 2022.

23

APP China
APP
ChinaSustainability/ESG
Sustainability/ESG
ReportReport2022
2022

Annual Focus: Protecting Our Home Planet

Upgrading the Gas Hood Paper Machine Reducing Gas Consumption to Zero
Hainan Production Base has 16 gas hood paper machines,

heat from condensate water. By the end of 2022, three paper

problems of high gas consumption and high greenhouse gas

results in reducing the unit gas consumption to 0 and the unit

whose high production capacity also coexisted with theemissions. APP China established a cross-department team oftechnical experts to comprehensively analyze factors affecting
gas consumption, such as equipment and raw materials. Theymachines had been completed, which achieved remarkable

comprehensive energy consumption of the paper machines by
20%.

conducted in-depth on-site surveys and precise calculations,

Between October 2021 and August 2022, this pilot project

the gas hood with a steam hood and the gas hot air systemproject in China, which is expected to increase its revenue by

developed multiple optimization plans, and ultimately replacedwith a steam hot air system for the overall hood system of
the paper machine. They also implemented measures tostrengthen energy cascade utilization and recover waste

reduced a total of 2,990 tCO2e. APP China will replicate thisRMB28 million. In addition, APP China plans to establish a

China-Indonesia team to promote this practice in APP's mills inIndonesia.

Water Resource Recycling and Reuse

Strengthening the Use of Biomass Fuels
Increasing the use of biomass fuels is an important way forforest resources to develop biomass energy forests in multiple

emissions. Hainan Jinhai Pulp & Paper and Guangxi Jingui

fissa biomass fuel forests in Guangdong and Guangxi. In

evaporate, burn and causticize the black liquor generated

Academy of Forestry's Institute of Fast-growing Trees to visit

manufacturing enterprises to save energy and reduce carbon
Pulp & Paper have been using alkali recycling technology toin the pulping process to recover heat and caustic soda, andthe recovered heat was mainly used for heat generation andpower generation. Meanwhile, other mills also take measures
to strengthen the efficient recovery and utilization of otherbiomass fuels, such as bark and wood chips. In 2022, a total of

3,516,670.13 tons of biomass fuels, including black liquor, bark,addition, APP China Forestry invited experts from the Chinese
its plantation in Hainan to conduct field research on biomasscollection and processing, and biomass fuel forest planting. The

Guangxi Jingui Pulp & Paper

Increased water reutilization rate of pulping

Increased water reutilization rate of pulp, paper

process to 95.34% and 96.90% respectively

measures such as the purification and reuse of net

process and paper and paperboard production
through measures such as the reuse of reclaimed

water, the reuse of sealing water, and the reuse ofcondensate water in the pulping process.

and paperboard production to 94% throughspraying water, the multi-disc grading and reuseof paper machine white water, and equipment
upgrades.

experts also participated in the training conference on biomassenergy forests theories and technologies hosted at the sametime.

wood chips, roots, and pulp residue, were used in the mills

In 2022, APP Forestry Hainan BU launched a biomass supply

Gold East Paper

Hainan Gold Hongye and Hainan Gold Shengpu

the previous year.

project. After several rounds of operation process identificationand evaluation, and quality inspection and improvement,
the biomass fuel produced in Hainan finally meets theAchieved a water reuse rate of 94.75% for printing
and writing paper production through measures

Effectively reduced wastewater discharge bysuch as water-saving upgrading of the paper

pulping process, reducing its 2022 unit wastewater

within the reporting scope, an increase of 10.46% compared toForestry biomass energy is a major source of biomass energy
and an important component of the implementation of thecircular agricultural development model in the 14th Five-

Year Plan for the Development of Circular Economy . In 2022,
APP China Forestry leveraged its self-owned plantation and24

locations, including growing a total of 1,020 mu of Castanopsis

Hainan Jinhai Pulp & Paper

specifications and quality standards of the mills. By the end of2022, APP Forestry Hainan BU had provided a total of 24,751

tons of biomass fuel to the mills operated by APP China, playing
a role in helping them increase the utilization ratio of biomassenergy.

machine vacuum condenser and the use of ultra-

clear white water recycling and reuse technology.

reusing the white water from the extrusion

discharge to 4.75 tons per ton of paper produced,
down 33% year-on-year.

25

APP China Sustainability/ESG Report 2022

Annual Focus: Protecting Our Home Planet

Developing
Utilization of Non-hazardous Industrial Solid Waste as Resources
Hainan Jinhai Pulp & Paper vigorously promotes the green

solid waste of the company mainly includes ash, furnace

resources, and strives to explore new ways to increase thesludge, recycled paper fibers, pulp residue, bark, and wood

development mode, actively attempts to utilize solid waste
utilization rate of solid waste as resources. The non-hazardous

Degradable Products"zero plastic" paper cups, "zero plastic"

While actively developing degradable

fresh produce wrapping paper, straw basepaper, and lamination-free kraft paper, etc.

Products made with these materials, such as
paper cups, paper bags, and food boxes, canchips.

from the bottom of the MB boiler in the power generation unit. They are both good building materials and used widely.

be recycled to make paper or disposed withseries of "zero plastic" products, such as

oil-proof food-grade board, antibacterial

bottom slag, desulfurization gypsum, green mud, white mud,Ash is generated in the boiler flue gas dust removal process in power generation unit, and bottom slag is the slag discharged

In recent years, APP China has launched a

APP China's Bio-Based Composite (abbreviated as "BBC")showcase of APP's environmental product development, thisgeneration unit. It can be used for the production of various gypsum boards or as a cement retarder.

promoting its industrial application in thepaper industry.

automobile materials, biodegradable FIBC bags, and foodplates, etc.

BBC has passed a number of international environmental

to ordinary plastic reinforcement products. Its raw materials

variety of industrial and consumer applications, it has a muchcontent, 100% compostable and biodegradable comparedare extracted from natural materials, and after use, it can beseedlings for reforestation as humus, ensuring outstanding
value of circular economy.

As a hollow fiber, BBC is more easily compatible with various
biodegradable plastics with special treatment, giving plastic
composite materials greater application possibilities, such

White mud is discharged during emergency repairs in the causticization unit, and has been fully reused through processscaling-up of degradable technology,

environmentally friendly product BBC has 91% bio-based

recycled and decomposed by microorganisms to cultivate
Green mud is produced in the digestion section of the causticization unit, and can be added in fuels with cement.

products, we also strove to promote theAn Innovative Cellulosic Biomaterial

product, made its debut at the 2022 CIIE. As the latest
Desulfurized gypsum is a by-product obtained from the limestone-gypsum wet desulfurization process in the power

the composting and degradation treatment.

as optimizing the physical strength and heat resistance ofcertifications and quality tests. Because it can be used in agreater plastic reduction and carbon emission reduction

potentials compared with ordinary materials. Taking China's

annual production of 800,000 tons of biodegradable plastics in

2021 as an example, adding 10% of BBC can help reduce carbon
emissions by approximately 240,000 tons. The widespread useof this material can effectively promote the development ofgreen circular economy in atmosphere, soil, and ocean, andmake a positive contribution to help achieve China's "dualcarbon" goal.

improvements.

Sludge is generated from various sedimentation tanks in wastewater treatment plants, mainly consisting of fine fibers,

microorganisms, humic colloids, and silt. After dewatering, it can be sent to the power generation unit for incineration.

Recycled paper-making fibers are generated by sedimentation of paper-making wastewater in a sewage treatment plant,

mainly consisting of fine fibers and silt; pulp residue is produced in the cooking section of the pulping unit, mainly consistingof fiber. They can be used as raw materials for the production of low-end paper products.

Bark and wood chips are generated during the process of log peeling and wood chips screening in the wood preparation

unit, mainly consisting of lignin and fibers, and they have high heating value and can be used for incineration in the power
generation unit.

APP China Launches the BBC Product at the 5th CIIE

26

27

APP China Sustainability/ESG Report 2022

Annual Focus: Protecting Our Home Planet

Breakthroughs in Microfibrillated Cellulose Reinforced Packaging Paper Production Technology
In June 2022, the "R&D and Industrialization of Key

petrochemical additives used, thereby contributing to the low-

Paper Production" project of Ningbo Asia, in cooperationindustry.

Technologies for Microfibrillated Cellulose Reinforced Packaging
with Ningbo Institute of Technology of Zhejiang University

carbon and environmentally friendly development of the paper

and Zhejiang University of Technology, was successfullyWith the three-year project cycle, this project focuses onin 2022. Microfibrillated cellulose (MFC), mainly derived fromsuitable for industrial applications, aiming at solving therecognized as a Key R&D Plan and "Flagship" Project in Ningbo
plant fibers through mechanical defibrillation, is a cellulose

bottleneck problems of current industrial applications ofmaterial with one-dimensional nanoscale fibers and excellent
biodegradability. MFC can be used as a "green" additive in

MFC reinforcement technology in making high-performance

paper production, with the potential to replace non-degradable

Application of Degradable
Packaging Materials

pulp pretreatment and surface modification technologies

packaging paper, and promoting the large-scale application of
MFC in the field of packaging paper production lines.

As an important part of the paper industry,also focused on the research of fully

APP China in exploring the implementation

the petroleum-based plastic film packaging

packaging materials are a key focus area forof the circular economy. In 2022, Gold

Hongye Paper launched a new degradable
packing carton for its VIRJOY zero-carbon

tissue, which is made of fully biodegradable
materials and printed with green water-

based ink to minimize its environmental
impact. Meanwhile, Gold Hongye Paper

biodegradable materials as a replacement tocurrently used to make this single-packtissue product fully degradable. The project
has completed laboratory evaluation andpartial equipment sampling evaluation,

Steadily Promoting Low-carbon
Transformation to Address
Climate Change
Sustainability Trends

and further product development forcommercialization is currently underway.
Influenced by human activities andand carbon neutrality goals. Since then, theIn the process of reducing carbon emissions,experiencing climate change characterized

number of policies to establish a "1+N" policypressure to accelerate the transformation

natural factors jointly, the world has beenby global warming in the past century. In
2022, extreme weather events occurred
frequently around the world, and theimpact of climate change once again raised
widespread concerns. As emphasized in

the Sixth Assessment Report of the United

Nations Intergovernmental Panel on Climate

related policies have been issued by local

governments and at specific industry level,

all aiming to promote a well-coordinated andsteady-paced low-carbon transformation ofboth the economy and society.

The low-carbon transformation of therise will far exceed 1.5° C and catastrophic

China's goal of achieving carbon neutrality.

events will occur more frequently, causing

irreversible damages to both human society
and the environment of our planet.

Facing the unprecedented challenge, it has

become a global consensus to take positive
measures to cope with climate change. For
China, addressing climate change is not

only an important area for the country's

participation in global governance, but alsoa crucial pillar for promoting high-quality
economic development and ecologicalcivilization construction. In September

2020, China announced its carbon peaking

28

system, and a series of energy and climate-

Change (IPCC), without timely deep emission
reduction measures, global temperature

VIRJOY zero-carbon tissue uses
biodegradable packaging

central government has successively issued amanufacturing industry plays a crucial role in
As one of the first batch of industries

included in the national carbon trading
system, the papermaking enterprises'
progress in responding to the "dualcarbon" goals has attracted great attention.

Traditional papermaking industry is a majoruser of resources and energy. However, bydeveloping the "Integration of PlantationPulp-Paper" model, promoting clean

production, strengthening the recycling
and reuse of resources, and developing

and utilizing biomass as a substitute forfossil energy, the papermaking industry has

papermaking enterprises face not only theand upgrading of existing production

modes, but also a number of significant
opportunities, such as cost reduction

brought by exploring the energy-saving
and carbon-reducing potentials acrossthe entire value chain, and addressing themarket demand for green products throughindustrial restructuring. In addition, byconforming to the development trends of

low-carbon electricity and electrification ofenergy use, papermaking enterprises canenjoy the benefits brought by the overall
low-carbon transformation of society.

Papermaking enterprises shall take theinitiative to shoulder their own carbon

reduction responsibilities and work together
with their stakeholders to explore green

opportunities to develop a new paradigmof low-carbon transformation for thepapermaking industry along the process

to support the realization of national "dualcarbon" goals.

tremendous potential for carbon reduction.

29

APP China Sustainability/ESG Report 2022

Annual Focus: Protecting Our Home Planet

APP China's Practices
APP China actively implements the strategic decisions of the government regarding carbon peaking and carbon neutrality, fully integrating green
transformation into corporate operations, and undertaking actions to mitigate and adapt to climate change from multiple dimensions.

Governance

APP China has established a climatechange governance system led directly by
the Board of Directors, that has identified
green transformation as a key development
concept of the Company, and leads andoversees the overall implementation of theCompany's green transformation plans.
Under the Board of Directors, the Economic
Committee of APP China is the highest-level
management body responsible for guiding
the direction and ensuring the orderly
implementation of the green transformationof the Company, including formulating
carbon emission reduction targets, planningcarbon emission reduction projects, andsetting and managing carbon emission
reduction indicators.
Under the guidance of the Economic
Committee, APP China has carried out aseries of important climate action initiatives,
such as establishing a Carbon Neutrality
Project Executive Committee, launchingthe "dual carbon" strategic plan, enhancing
the utilization of green and clean energy,
exploring VCS and CCER forestry carbon

sink projects, and producing carbon
neutral products. In 2022, we had basicallycompleted the drafting of our "dual carbon"
strategic plan, and formulated our carbon
emission reduction targets and carbon
emission reduction road map.
With its unique Management by Olympic
System (MBOS) that highlights on employee
participation, APP China encourages all
employees to actively participate andcontribute to the continuous optimizationof energy-saving and carbon emission
reduction performance of the Company
through the approach of comparing,learning, catching up, helping, andsurpassing. By participating in the MBOS
proposal competition, employees exploredand formulated a variety of energysaving and carbon emission reduction
improvement plans, and formed variousof Skill Development Activity (SDA) toensure the timely implementation of the
improvement plans in production andoperations.

Hainan Jinhai Pulp & Paper Continuous Tracking Energy-saving Indicators
Applying the MBOS and KPI tracking management approach,system, and checked the progress at weekly meetings. The

targets into workshop efficiency KPI targets for management.

implementation of improvement plans each month, with the

Hainan Jinhai Pulp & Paper has broken down energy-saving
Specific annual and monthly targets have been set for eachlevel of operations, tracked with the KPI tracking management

Economic Committee

Carbon Neutrality Project
Executive Committee

Strategy Department

Set the strategic direction of the Company's green transformation. Responsible for leading
and overseeing the overall implementation of the Company's green transformation.

strategic plan in 2021, with the overallplanning almost completed in 2022, setting

Targets of APP China Carbon

as the benchmark year. We strive to achieve

Carbon peaking by 2030 andcarbon neutrality by 2050

the carbon neutrality goal through measures
such as reducing carbon emissions andintensity, improving energy efficiency,

developing and adopting cutting-edge

low-carbon technologies, and promoting

carbon emission reduction throughout theManagement:

Reduce carbon intensity per unit
product by 30% by 2030

value chain. The targets have been broken

down to our business units, with the specificsub-targets and technical plans still in theprocess of internal consideration.

・ Improve energy generation efficiency

・ Reduce energy consumption in production processes

Enhancingenergy efficiency

Improvingenergy structure

green transformation plans, and ensuring the orderly implementation of green transformation activities.

・ Carry out self-built photovoltaic power station projects

・ Purchase green electricity such as onshore and offshore wind
power, and photovoltaic power

・ Increase the proportion of biomass energy

Consisting of members from headquarters departments, such as the Strategy Department, theCore Measures

as directors of various business units, the Committee is responsible for the implementation of the

Carbon Emission"dual carbon" goals at each unit.

the departments and the employees involved.

key carbon management targets with 2021

Responsible for executing the decisions of the Board of Directors, guiding the implementation of theDigitalization Office, the Culture and Communication Department, and the Technology Center, as well

performance data included in the performance evaluation of

APP China started drafting its "dual carbon"

Strategic Goals

APP China's Governance System for Addressing Climate Change

Board of Directors

company tracks the progress to realize the KPI targets and theCarbon Capture,of Bohui Paper's

Utilization andReduction Strategy

Responsible for formulating and tracking the progress of the "dual carbon" goals and road map,

Storage (CCUS)

Promoting upstream

coordinating the implementation of key carbon emission reduction measures, and tracking andand downstream

managing carbon emission reduction indicators.

clean energy
substitution

・ Track CCUS technology progress and gradually invest in carbon dioxide captureand separation-related equipment

・ Encourage raw material suppliers and customers to use clean energy

・ Promote upstream and downstream logistics service providers to use clean
energy in transportation

Promoting the
Headquarters departments
and BUs

30

Carry out carbon neutral capacity building, carbon accounting, carbon emission quota trading,

product carbon footprint accounting, energy saving and carbon emission reduction, carbon asset
development, green financial product development, etc.

development ofcircular economy

・ Develop more recyclable and degradable new products
・ Promote the upgrading of waste treatment technology

31

APP China Sustainability/ESG Report 2022

Annual Focus: Protecting Our Home Planet

Climate Risks and Responses
Risk Factors

Risk Factors

The release of China's "dual carbon" goals has accelerated the pace that carbon emission and carbon
intensity to replace energy consumption and energy intensity as the focus of government policies. National
and local governments may introduce stricter carbon emission reduction policies and regulations, thereby
increasing the Company's compliance operating costs.
The power plants of APP China's main mills have been included in the national emissions trading systems.
It is expected that the paper industry may be included as a whole in the near future. High carbon emissions
may increase the operational costs of the Company.

The manufacturing industry's response to climate change is increasingly attracting the attention of
stakeholders, with an increasing number of manufacturing companies at home and abroad have already set
their carbon emission reduction goals or net-zero emission goals. If the Company has no positive goals andactions, it may be questioned by stakeholders, which will affect its brand image and reputation.

Transition RisksReputation Risks

Response Measures

Transition
Risks-Policy
Risks

Each business unit of APP China formulates a detailed policy list every year, against which they conduct
compliance inspection regularly and implement relevant improvement measures in a timely manner. When
new policies are introduced, all business units will organize relevant thematic training on the new policies
to ensure relevant departments fully understand policy requirements, and formulate relevant work plansaccordingly.

APP China has plantations in multiple locations in China. Extreme weather events such as typhoons, hightemperatures, droughts, and heavy rains caused by climate change pose severe risks and challenges to
the Company's forest operations, as well as the employees and other workers' safety and their property
security.

The Company's mills are mainly located in coastal areas, which are prone to risks such as typhoons andfloods. Frequent extreme weather events may increase the Company's operating costs and even affect thestability of its operations.

The Company has enhanced product carbon emission management, set the target of reducing productcarbon footprint by 30% by 2030, launched a number of carbon neutral products, and planned to build"zero-carbon mills", to actively address potential emerging regulatory risks in the future.

Response Measures

Risk Factors

Physical RisksAcute Risks

The application of forward-looking technologies such as CCUS is an important way to achieve carbon
neutrality, but relevant technologies are not mature yet so there is application risk to certain degrees.

Transition RisksTechnology Risks

While introducing advanced low-carbon technologies, the Company continues to strengthen its R&D efforts
and actively promote the application of R&D achievements in its mills to effectively reduce the cost of newtechnology applications.

Risk Factors

In the long run, climate change will lead to more frequent extreme weather events, and the overalltemperature increases will also cause systemic ecological impacts, such as increased risk of plant diseases
and pests. For paper making enterprises that rely heavily on forests for raw materials, the timber supply
capacity of both their own plantations and those of their suppliers will be affected, which may increase theirprocurement costs for raw materials and even affect the continuity of their production and operations.

Risk Factors

As consumers become increasingly aware of the green and low-carbon trend, and sustainable consumption,
an increasing number of consumers tend to prioritize green and environmentally friendly products
regarding their purchases. Meanwhile, market demand for degradable paper products has seen a significant
increase due to the introduction of government policies that limit or ban the use of plastic. Therefore, theCompany may lose market competitiveness if it fails to develop outstanding green products.
The Company has successively launched a series of "zero plastic" and "carbon neutral" products, and anumber of its industrial, cultural and tissue products have obtained green product-related certifications,such as the China Environmental Labeling Product Certificate. In the future, the Company plans to launch agreater selection of green and low-carbon products.
Multiple mills of the Company have been recognized as national and local "Green Factories", and theCompany's long-term efforts in energy saving and emission reduction have laid a solid foundation for
reducing product carbon footprint.

32

APP China Forestry plants different varieties in different areas based on the geographical location and thecharacteristics of the environment, such as typhoon-resistant varieties in coastal areas. There are suitablechanges for planting techniques according to local climate conditions, such as increasing afforestation
planting density and deep planting of trees in typhoon-prone areas, to enhance the wind resistance of thetrees.

All plantations and mills purchase relevant insurance coverage every year to reduce potential losses causedby disasters.

The Company actively engages in external cooperation to jointly explore the application of cutting-edge
industry technologies. For example, Gold East Paper planned to collaborate with universities to conduct
carbon capture research to promote the application of CCUS technology.

Transition RisksMarket Risks

APP China Forestry has formulated a series of emergency response plans for disasters, such as fires, winddisasters, and diseases and pests, to ensure the timely and effective disposal of the impact of disasters andminimize the loss of forest assets as the result.

The Company's mills maintain close communication with local meteorological services through multiple
channels such as WeChat, email, and telephone to ensure access to accurate and real-time alerts. The mills
set a robust emergency plan system and enhance the preparedness of emergency facilities and supplies,
and establish a dedicated emergency firefighting and rescue team on duty 24/7, to ensure timely disaster
relief.

Response Measures

Response Measures

The Company has been attaching great importance to green development, and has incorporated green
transformation into its core development strategy. It has formulated its own "dual carbon" targets and istaking actively measures to ensure their realization.

Risk Factors

The Company actively promotes energy structure transition, implements energy-saving technologicalupgrades, strengthens the research and application of new technologies, and vigorously promoting theconstruction of digital and intelligent mills to create synergistic effects of energy saving and carbon emission
reduction.

As the government increasingly tightens the control over energy consumption and carbon emissions,the Company's existing technologies and equipment may face the risk of accelerated obsoletion. Either
the application of new technologies and equipment or the transformation and upgrading of existing
technologies and equipment may increase the Company's operating costs.

Response Measures

Response Measures

Physical RisksChronic Risks

The Company aims to enhance its risk response capabilities from seedling cultivation with intensified
investment in the R&D of seedling varieties with characteristics such as wind resistance, waterlogging
resistance, cold resistance, disease and pest resistance, and high pulp yield. Meanwhile, the Company isactively exploring ways to increase the yield per acre of its plantations.

Sustainable forest management improves the climate adaptability of plantations. The Company carries
out CFCC/PEFC forest management certification and ISO14001 Environmental Management System
certification every year to ensure improve sustainable forest management. In addition, it also keeps
increasing the procurement of certified raw materials to promote sustainable forest management along its
supply chain.

33

APP China Sustainability/ESG Report 2022

Exploring Green Opportunities
and Innovations

Annual Focus: Protecting Our Home Planet
Adhering to the concept of "reducing carbon emissions and increasing carbon sinks", we strive

Promoting Green Consumption

fully tap the opportunities in the climate-related risks.

We have been intensifying our efforts

Premium Roll Tissue and the VIRJOY zero-

general public will become increasingly

carbon" products, with a number ofas the officially designated tissue productfriendly concept. Meanwhile, we have been

to actively carrying out green innovations from the perspective of the entire industry chain toto develop "carbon neutral" and "zerohousehold, cultural and industrial paper

Developing Forest Carbon Sinks
In 2022, APP China's plantations continued

party organization to conduct inspections in

Guangxi Jingui Pulp & Paper has successfully

hectares, an increase of 5.7% compared

forest land has been designated as Hainan

by future income from forest carbon sinks.

performing carbon sink accounting in ourplantations, of which 70,000 mu is eligible

to grow and totaled an area of 286,000

to the previous year. In 2020, we started

plantations, and made the plan to makeit an annual task from 2022. According tocalculations by a third-party organization, as

the plantations in Hainan BU. 200,000 mu of

Tropical Rainforest National Park in ourfor VCS project development. The project is
expected to be completed by 2024.

of the end of 2022, the carbon stock of ourplantations reached 44.84 million tons ofsinks of 2.45 million tons of carbon dioxide.
and promoting the utilization of the forest

This was the first loan within this category

267,400

certification. In 2022, APP China launched
two new zero carbon tissue products, theBreeze Blossom Zero-carbon Floral Essence

for the 2022 second Carbon Neutral

Boao Conference with its carbon neutral
certification and its carbon offset of 570

grams of CO2 each box. It is our hope thatby promoting carbon neutral products, theaware of the low carbon and environmental
continuously promoting the CFCC/PEFC

forest certification system in China in recent
years, urging the public to take actions andpromote forest conservation through green
consumption behaviors.

in Guangxi, which showcased the benefits

in green finance brought from APP China's
forest carbon sinks.

APP China's Plantation Area (hectare)carbon dioxide, with a net increase in carbon
Meanwhile, APP China is actively exploringobtained a RMB50 million as a loan backed

products obtained carbon neutral productcarbon tissue, and the latter was selected271,100

270,911

2020

2021

286,343

carbon sinks of our plantations. In 2022,

APP China Forestry launched the Hainan

VCS carbon sink project and invited a third-

2019

2022

Developing and Promoting Low-carbon Technologies
We have been accelerating the R&D ofthis technology. They conducted research

the technological monopoly behind. This

reduction technologies to promote theof the suppliers, helped them identify

mills with an power saving rate of over 60%.

new energy-saving and carbon emission
efficient utilization of energy and achievea win-win situation for environmental andeconomic benefits.

Maglev turbo vacuum pump is a newenergy-saving technology that dominates

the market with a technological monopoly,
which results in high costs of equipment
as well as potential technological risks

regarding its large-scale applications. APP

China set up a special task force regarding

and analysis on the existing technologies
application scenarios of the technology

in tissue production, and encouraged the

suppliers to initiate a series of technologicaltransformation and upgrading projects.
Finally, through the use of five newtechnologies including magnetic bearings,
permanent magnet motors, ultra-highfrequency converter, cloud-based intelligent
monitoring, and dual-motor parallel

turbines, this technology was successfully
adopted within the Company, leaving

technology has been applied in our Hainan
If fully applied in our tissue production

operations, it was estimated to help theCompany save over RMB20 million inelectricity cost annually. We have applied

this technology to APP's tissue production
facilities in Indonesia. Currently, we are

APP China's exhibition booth at CIIE

researching the opportunities of applying
this technology in our cultural paper andindustrial paper production operations.

Bohui Paper Passed Carbon Neutral Certification Review
In October 2022, Bohui Paper successfully passed the carbon

verification of carbon emission calculations through a variety ofCertificate for its white board, cultural paper, and packaging

stream access, meeting exchanges, on-site facility inspection,neutral certification review and obtained the Carbon Neutral
paper products. The company had calculated the carbon

dioxide emissions generated during the entire product life
cycle, including raw material transportation, production,

packaging, product transportation, wastewater discharge,

and auxiliary production processes. During the carbon neutral

document reviews, and personnel interviews. By offsetting the

GHG emissions of the product life cycle in the National Voluntary
Emission Reduction Registration System, the company realized
carbon neutrality of the relevant products over the life cycle.

certification on-site review, the reviewers rigorously examined

As a positive move to promote green products, carbon neutral

and emission facilities within the carbon neutrality boundary,and transparency of its products with enhanced accuracy andthe management of greenhouse gas (GHG) emission sources
GHG emission-related data sources and parameters, and the34

methods, including data sampling, energy consumption data

certification allows Bohui Paper to increase the credibility
transparency of GHG emission data.

35

APP China Sustainability/ESG Report 2022

Annual Focus: Protecting Our Home Planet

Promoting Sustainable Consumption by Raising Awareness of China Forest Certification System
From September 26th to October 1st, 2022, the nationwide

China, etc., provided the audience with a series of well received

by APP China, China Forest Certification Council (CFCC), andforest certification, PEFC and sustainable forest management,roadshow "China Forest Certification in Action" co-hosted

Programme for the Endorsement of Forest Certification (PEFC)

was held in Guangzhou. The event aimed to promote and raise
the public awareness of China forest certification system andallow more people learn about forest certification as a reliablereference regarding the sustainability information of paper
products for consumers to make their purchase decisions.
At the symposium during the event, experts of the Forest

sharing on promoting high-quality forestry development withand sustainable development of enterprises and forest

certification practices. The event also promoted the China forest
certification system in campuses, communities, and officebuildings in Guangzhou through face-to-face communication,and conducting questionnaire surveys, etc., aiming to offer

people tissue-related everyday tips and promote healthy andenvironmentally friendly ways to use tissue.

Certification National Innovation Alliance's members, including
Guangdong Academy of Forestry, PEFC China Office, and APP

Protecting Biodiversity and Promoting Harmony
between Humanity and Nature
Sustainability Trends
Biodiversity not only provides humans

biodiversity strategies and action plans inare also increasingly concerned about

various industrial materials, but also plays

the integration of biodiversity into theand companies that lack biodiversity

with food, fiber, timber, medicinal andan important role in maintaining ecologicalbalance and serves as a crucial foundation
for human survival and development.

However, with the rapid growth of the

population and the intensification of human"China Forest Certification in Action" nationwide roadshow

economic activities, endangered species areconcerns of governments and businesses,
and implement monitoring, verification,assessment, reporting and other measures
to promote the implementation of the
Framework.

environmental issues, including biodiversity,
impact management actions will facesignificant reputation risks. In fact, the lossof biodiversity and deterioration of theecosystem will directly affect the businessactivities of enterprises, bringing risks

such as increased costs and disruption ofoperations.

increasingly becoming extinct, the area of

Companies face a series of biodiversity-

biodiversity is also facing severe threats.

stakeholders regarding the impact of their

There are close interconnections between

related laws and regulations will becomeby strengthening biodiversity conservation,

various ecosystems has plummeted, and the
The international community is taking

active measures to promote biodiversity
conservation. In December 2022, the15th Conference of the Parties (COP15)(the second phase) to the Convention on

Biological Diversity was successfully heldin Montreal, Canada. COP15 adopted thelandmark "Kunming-Montreal Global
Biodiversity Framework" (referred toas the "Framework"). In the future, allsigning parties will update their national

36

accordance with the Framework, promote

related risks with increasing concerns fromoperations on biodiversity. Biodiversitystricter in the future, and companies

that fail to comply with them will facehigher regulatory risks. Most mainstream
ESG ratings at home and abroad areincreasingly considering companies' efforts

in biodiversity conservation, and companies
that do not prioritize biodiversity issues

may lose investor support. Furthermore,environmental organizations, media,
consumers, and the general public

many environmental topics. For example,

the number and area of wildlife habitats will
increase, which also plays a positive rolein promoting the realization of "net zero"

emissions of greenhouse gas. Therefore, toavoid relevant risks and ensure continued

competitiveness in the future, it is necessary
for companies to attach importance tobiodiversity, take positive measures tomanage the impact of their operations on
biodiversity, and protect biodiversity.

37

APP China Sustainability/ESG Report 2022

Annual Focus: Protecting Our Home Planet

APP China's Practices
APP China regards "insisting on integrating

Forest Law , the Wildlife Protection Law , andsuch as guaranteeing that all wood chips

resources and biodiversity conservation,and has formulated relevant policies andappropriate forest management activities tosustainable development of foresthigh conservation value areas protection,

the Regulations on Wild Plants Protection ,regulations, such as the Afforestationand ecological protection into social andOperation Standard , the Wildlife (RTE

key principles of forest management,

and the Measures for the Administration of

economic development" as one of theSpecies1 Included) Protection Regulations,and has included "protecting biodiversity

Biodiversity Conservation and Monitoringprocess control of business activities, andbiodiversity conservation.

and soil and water resources, apply full-maintain regional ecological stability" into normalize the implementation of

the APP China Forestry Vision, Mission andRegarding raw material procurement,

national laws and regulations such as therequirements and regulations for suppliers,

Policy . The Company strictly complies withcome from plantation forests, adopting

protect high conservation value (HCV) forests
in source forests of timber, and forbidding

the Convention on International Trade inEndangered Species of Wild Fauna and Flora

Rights and High Conservation Value 4-6 .
Species diversity is one of the six typesof HCV. If rare, threatened or endangered
wildlife species are found in monitoring,
our staff will take actions to protect andmanage in accordance with relevant HCV
management requirements.

Local governments where our plantations
are located are increasingly attachingimportance to biodiversity conservation.
For example, there were government-

initiated conservation awareness-raising

In 2022, Hainan Jinhua Forestry Co., Ltd.

protected plant, Alsophila spinulosa , infor wildlife and HCV species in its plantations

identified the national second-classand buffer zones around the trees. In 2022,
the Alsophila spinulosa , designating acarried out regularly monitoring activities
during the reporting year adhering to theprinciple of "protecting biodiversity andmaintaining ecosystem stability". The

by fire through measures such as enhancing
the construction of firebreaks andconducting inter-tillage weeding. Throughthese efforts, there was no incident of fire

during the year in all six major forest farms in
Hainan.

company set a target of controlling theAfter receiving the report that Asian elephants were witnessed in the plantation, Lancang Huimin forest farm immediately participatedin the protection activities of the local government.

Indian bison, and in Lancang County for

Identification and Protection of Traditional

respectively. In December 2021, weto prevent fire hazards and minimize theParticipating in Asian Elephant Protection

monitoring in accordance with theand Management Procedures and thepossible damage to the ecosystem caused

Huimin plantations in June and October,trees as habitat for rare species to protect(CITES) Appendix I.

campaigns in the Naban River Reserve

the High Conservation Value Identification

them from human disturbance or damage.

we continued to monitor and protect

All forest farms of APP China Forestry
company's management systems such assighted passing through Lancang

for Conservation of Nature (IUCN) andare not on the list of the International Union

RTE Species: A collective term for rare, threatened, and endangered species.

and Conservation

fire hazard rate within 0.2 ‰ , and strove

Lancang BU, and set up protective signs

we have formulated a series of relevant

continuously carry out forest HCV

100-hectare area of plantations around theherds of Indian bison and Asian elephants

the use of waste and wood residues that1

Biodiversity Monitoring

In the monitoring in 2022, there werein Xishuangbanna for the protection of

Asian elephants, both located in Yunnan;
and for wild plants in Jiangxi Province.

The company actively responded to local

government initiatives, participated in these
conservation awareness-raising campaigns,

and is ready for greater involvement in moreconservation activities. In our Lancang

plantations in Yunnan, part of eucalyptus

Joined the local "Asian elephant alert group"

Sent Asian elephant monitoring personnel

local forestry administration in awarenessmanagement of Asian elephant monitoring

to stay informed, actively cooperated withraising and protection activities, andharming or killing of Asian elephants andpaying attention to safety precautions.

Indian bison living in the forest. To betterin villages along the route of the herd

and chemicals for weeding in adjacenteucalyptus forest, left more vegetation for

relevant skills.

in operations, such as strictly prohibiting

Carried out public safety and wildlife

protect them, we stopped using pesticidesorganized by local government to improvestrengthened training and awareness raisingplantations overlap with natural woodlands,
and we have identified that there areto participate in the training on information

protection awareness-raising activities
promptly.

Participatingin Asian
Elephant
Protection

Cooperated with government agencies

and arranged personnel to be on duty on
holidays to monitor the Asian elephants
along their route to help prevent major

safety accidents or injuries to the animals.

them to graze by using manual weeding inforest with trees younger than three years,
and stopped weeding afterwords.

Lush vegetation in Lancang plantations

38

39

APP China Sustainability/ESG Report 2022

Annual Focus: Protecting Our Home Planet

APP China Forestry's Key Biodiversity Conservation Measures
Forestland selection stage

Afforestation planning stage

・ Only commercial forestland defined by
the government is accepted.

・ Conduct biodiversity monitoring andthe afforestation planning survey. Onsite
administrators must communicate withlocal forestry bureaus, forestry stations,and village committees to learn whether
any protected wildlife is ever detected in
the forestland; any wildlife detected shallbe clearly marked on the planning map
and documented.
・ Any wildlife nests and key protected
plants detected shall be clearly marked
on the field topographic map, with
noticeable signs placed on site for
identification and protection.

Ecological monitoring・ Engage in long-term cooperation with
universities and research institutions
in carrying out ecological monitoringof plantations and conducting plantbiodiversity surveys, and strengthen
protective measures or modify forest
management practices in accordancewith the monitoring results.

Biodiversity Impact
Monitoring and Assessment

During daily patrols
・ Increase awareness of wildlife protection.
・ Take immediate action to stop any illegal
hunting, digging or picking activities ofprotected wildlife in forestland.

Before operations
・ Forestry personnel train contractors
and operational workers inbiodiversity conservation, operation
techniques, safety of working spot,etc.

・ Prohibit contractors and workers
from using fire for production in theforestland, such as burning vegetatedland or performing controlled burns.

Monitoring Plant Biodiversity
In 2022, APP China Forestry Guangdong BU collaborated

In November 2022, APP China Forestry initiated a biodiversity

a eucalyptus plantation biodiversity monitoring project inEarth Sciences of Yunnan University. The survey mainly focusedwith Guangdong Eco-Engineering Polytechnic to carry out
Qingyuan, Heyuan, Yangjiang, and Shaoguan. The project

team designated sample plots of macrophanerophytes, shrubs
and frequency of macrophanerophytes, and the frequency,

and recording of plants in the entire sample area. The mainand calculated the indicators such as the density, dominancecoverage, and importance value of shrubs and herbs based on
the recorded data. Through the analysis of the survey data, it

a rapid upward trend compared with the previous year, and it
does not appear that eucalyptus plantations have significant

in eucalyptus plantations to analyze theimpact of eucalyptus plantations on plant
diversity. By conducting these monitoring
projects, the Company strove to find ascientific, quantitative, and objective
method to evaluate the ecological valuesof eucalyptus plantations, aiming to reduce
the negative impacts and ecological costs inthe management of eucalyptus plantations.
By looking for improvement opportunities
in the monitoring of ecological impact andplant diversity impact during the monitoringprocess, the Company continued to
optimize the monitoring contents to provide
a more scientific basis for the healthy andsustainable development of eucalyptus
plantations.

conducted comprehensive identification, measurement,

flora includes plants from the fagaceae family, such as Pinus

kesiya Royle ex Gordon, Castanopsis fleuryi Hickel & A. Camus,
Craibiodendronyunnanense W. W. Smith, Hongmuhe, etc., aswell as wild protected plants such as Litsea pungens Hemsl. andArchidendron clypearia (Jack) I. C. Nielsen, etc.

impact on the biodiversity of undergrowth shrubs and herbs.

The project team also compiled a catalogue of shrubs and herbs
found in eucalyptus plantations in Guangdong, which would
be continuously monitored during the subsequent year toensure an objective and sound assessment of the biodiversityof eucalyptus plantations.

・ Rare, threatened, or endangered
wildlife identified in forestland shallbe reported to relevant government
agencies promptly and placed underappropriate protection measures.
APP China Forestry has long-termcooperation with universities and research
institutions to monitor and track the
impact of forest management activities on
ecosystems and biodiversity. In 2022, theCompany cooperated with the Institute of
Ecological Industry of Guangxi Academyof Sciences and the School of Forestry of
Hainan University to carry out plantation
ecological monitoring projects in the fieldsof plant diversity, forest growth, soil fertility,
runoff field water quality, and water and soil
erosion, and cooperated with the Schoolof Earth Sciences of Yunnan University andGuangdong Eco-Engineering Polytechnic
to conduct a special monitoring project onplant diversity, recording and calculating
the understorey plant species richness

plantations, Pinus kesiya Royle ex Gordon plantations grownby local communities, and natural forests. The survey teamplantations is relatively high, the biodiversity indicators showed

・ Prohibit contractors and workers
from hunting or trading wild animals,
indiscreetly gathering or digging
protected wild plants, or destroying
the habitats of wild animals.

on three types of forest land, including APP China eucalyptus

and herbs at each survey site, recorded data from each plot

was concluded that the biodiversity conditions in eucalyptus

During forestry activities

survey project in Lancang in collaboration with the School of

Biodiversity Training

Biodiversity survey site of APP China Forestry and the School ofEarth Sciences of Yunnan University

APP China Forestry organizes biodiversityof protected wildlife and bulletin boards

and forestry staff at irregular intervals. The

tips, provide on-site training, and give an

training for various functional departments
training mainly covers the requirements of
biodiversity-related laws and regulations,the methods to identify key wildlife, survey
and monitoring methodologies, andprotection strategies and measures. At eachplantation, forestry personnel post picturesof environmental protection and safety

awareness-raising talk to the workers before
they started working every day. In 2022,

Lancang BU invited experts from Yunnan
University to conduct training on plant
diversity for its employees.

Organizing Thematic Training on Biodiversity
In September 2022, APP China Forestry Guangxi BU conducted

During the training, the company also introduced the specific

a combination of online and offline ways. During the training,

information on the identification and protection methods fora thematic training on biodiversity for all employees throughemployees studied the requirements of international

conventions and relevant national laws and regulations such as
the Convention on International Trade in Endangered Species

requirements for biodiversity survey, and provided detailed

HCV wildlife, as well as biodiversity conservation measures inforestry operations.

of Wild Fauna and Flora (CITES) Appendix I, II, and III , the China's

The training strengthened employees' awareness of biodiversityof Biodiversity: Vertebrates , and familiarized themselves withpersonnel on operational compliance and biodiversity

Red List of Biodiversity: Higher Plants , and the China's Red List

the catalogues of key protected animals and plants in different
regions in Guangxi to improve their biodiversity identificationconservation and provided effective guidance to forestry
conservation in plantations.

capability.
Eucalyptus trees in an APP China plantation

40

41

Environmental:
Creating a
Picture of Green
Development

Sustainable Forest Management

Managing Environmental Footprintof Operations

44
48

APP China Sustainability/ESG Report 2022

Environmental: Creating a Picture of Green Development
forest protection, etc. In addition, in

response to the evaluation requirements

Sustainable Forest Management

on internal audit and management

review that added to the new standard,expert auditors audited the review andrectification activities APP China forestry
conducted, covering its annual internal

audit, rectification of management review in

Our Commitment
Adhering to our forestry management concepts focusing on "compliance, technology, ecology, harmony, and sustainability",
we strive to achieve win-win economic, social, and ecological benefits through sustainable management of plantations.

2021, and current management status. The
rigorous and thorough audit did not findany major non-compliance issue, and allplantations had completed the rectification
for the observation items and minor issues
identified by the auditors.

Our Progress:

24 forestry companies, increased by 2 compared to 2021
286,342.76 hectares of plantations, up 5.7% year-onyear

19.2251 million seedlings cultivated in 2022, up
20.75% year-on-year
44.84 million tons of CO2 fixed in plantations, with a netincrease of 2.45 million tons of CO2 in forest carbon sinks

245, 246.28 hectares of plantations are CFCC/PEFC-

FM-certified, accounting for 85.65%

APP China Forestry conducted its annual CFCC/PEFC third party audit

Forestry Risk Management

100% of raw wood materials supplied by ourplantations to our pulp mills are CFCC/PEFC-FM-certified

We have formulated and been continuously

freezing, and diseases and pests, aiming

54% year-on-year; 103,982 mu affected

61% of our plantations are ISO 14001-certified

for disasters, specifying the response

measures for the various types of disasters,

disaster relief and minimize the loss ofyear. Among the area affected by natural

51% of our plantations are High Conservation Value-assessed

improving emergency response procedures
such as the Disaster Emergency Response

to ensure effective prevention and postforest assets.

by natural disasters, down 33% year-on-

disasters, there was 66,299 mu damaged
from freezing, down 41% year-on-year;

Procedures , the Lightning DisasterWith our robust disaster response

Emergency Response Plan , the Eucalyptus

the Company's plantations were underlosses caused by floods and droughts, up

reporting year, there was 9,114 mu of

diseases and pests was controlled at 0.61%,

Response Plan , the Typhoon Disaster

Frozen Disaster Emergency Response Plan ,specifying the response measures andprocedures for fire, strong wind, flood,measures, the overall disaster losses ofeffective control in 2022. During theour plantations affected by fire, down

36,041 mu affected by typhoons, down

19% year-on-year; and 1,642 mu suffered

100% year-on-year. The incidence rate ofwhich was within an acceptable range.

Sustainable Forest Audit
APP China Forestry carries out the

The Forest Certification in China - Forest

audit. Third-party audit organizations were

into effect on December 1, 2021, and 2022

review and assessment of the Company's

certification work of CFCC/PEFC-FM forest

Management (GB/T 28951-2021) cameManagement System certification every

was the first year that audits were carriedcertification and ISO14001 Environmental
year, using both internal and external audits
to identify projects that do not meet thecertification standards for rectification,

to ensure the continuous improvementof sustainable forest management anda green and sustainable source of theindustrial chain. In 2022, 12 APP China

Forestry companies received CFCC/PEFC-FM
certification audits, three new companies
initiated their certification process, andsix completed the re-certificate audits forISO14001 certification.

44

out in accordance with the new standard.
The Sustainability Department of APP

brought in to conduct comprehensive

forest management system and forest

management activities in accordance with
the newly effective Forest Certification in

China Forestry organized employee toChina - Forest Management (GB/T 28951-

interpretation in early 2022, and conductedaspects such as the implementation of laws

deeply study the new standard and its

internal audits of all aspects of their forest

management operations in accordance with
the new standard to identify and rectify any
deficiencies.

From April to July 2022, APP China Forestry
carried out its CFCC/PEFC third-party2021) standard, covering a wide range ofand regulations, forest land ownership anddisputes, the protection of the rights andinterests of employees and workers, theimplementation of forest management

programs, the cultivation and utilization offorest resources, biodiversity conservation,
environmental impact and assessment,

45

APP China Sustainability/ESG Report 2022

Environmental: Creating a Picture of Green Development

Risk Management Measures of APP China Forestry

Forest fire prevention
・ Formulated the Forest Fire Prevention Operation Manual toregulate the Company's forest fire prevention activities andensure the effective prevention and extinguishing of forest firesin accordance with the fire prevention policy of "focusing on
prevention and ensuring active fire extinguishing efforts".

・ Worked closely with local governments to advocate fire safety
awareness in villages around our forest areas and establishedan effective fire control mechanism with the villages
characterized by supervision by the government, prevention by
the company, and active participation of community members.
・ Established a forest fire command center at each forest area totake charge of the emergency response operations regarding
the prevention and extinguishing of forest fires, and formulate
forest fire emergency plans for each management level. Set up
a fire command center at each forest farm.
・ Organized forest fire safety education sessions and fire drills
at regular intervals to continuously strengthen employees' fire
safety awareness and preparedness for forest fires, to ensurethat employees master the forest fire emergency response
methods.
・ Built proper fire lines: cut 2- to 3-meter-wide fine lines in large
contiguous forest areas and forest areas near farmland, dry
land, villages, temples and other areas of greater fire risk tocreate a combustible-free space.

・ Required contractors to abide by the Company's Safety
Production and Environmental Protection Regulations , which
prohibits the use of fire for production purposes in forest areas,such as burning vegetated land or performing controlled burns.
・ Purchased forest insurance.

Frost protection
・ Strengthened research and experiment on frost-resistantvarieties of trees.
・ Established a frost monitoring and early warning
system, followed weather forecasts, and strengthened
communication with local meteorological bureaus toensure timely response to frost damage.

・ Improved the trees' resilience against frost by checking
and strengthening the stabilization of the roots in soil,
conducting proper pruning, applying antifreeze and antifrost controls to the soil, wrapping tress with burlap,
increasing nurturing and fertilizing, etc., after receiving
weather alerts.
・ Purchased forest insurance.

46

High Conservation Value Monitoring
Wind damage response・ Strengthened research and experiment on wind-resistantvarieties of trees.
・ Avoided planting during typhoon seasons to ensure thesurvival rate of sprout forests.

・ Enhanced the forests' wind resistance by increasing plantdensity and implementing deep planting in affected areas.
・ Pruned in advance upon early warnings of incoming
typhoons to mitigate wind damage, and activatedresponse plans right after to implement relief efforts
within the first 72 hours.
・ Purchased forest insurance.

APP China attaches great importance to

the Company's daily forestry operations.

were sighted in the forest land of Lancang(HCV) areas and takes active measures towith local community representatives tothe local "Asian Elephant Alert Group" tothe protection of High Conservation Value
maintain and enhance their conservation

value. The value of HCV forests mainly lies

in six areas, namely biodiversity, landscapelevel ecosystems and ecosystem mosaics,

ecosystems and habitats, basic ecosystemservices, necessities of local communities,
and cultural significance.

APP China Forestry monitors the HCV

conditions in our plantations on a quarterly

Forestry personnel needs to work together
survey and identify HCV at the operationsite and its surroundings, and make clear

markings on the identified HCV to ensurethat it is not affected during forestry

operations. Our forest farms maintainsmooth communication with local

communities and conducted awarenessraising and training activities regarding HCV
conservation.

basis to ensure timely conservation of the

In 2022, 51% of our plantations completed

and protection of HCV are integrated into

monitoring, a herd of wild elephants

HCV of forest land. In fact, the identification

Huimin Forest Farm. The Company joined
stay informed, actively cooperated withlocal forestry administration in protection
activities, and strengthened training andawareness raising in operations, aiming toboth protect wild elephants from injuries
and prevent property losses to local

communities. All our forest areas will carryout regular monitoring and protection ofrare wildlife subsequently.

HCV assessments. During the Q4 HCV

Disease and pest control
・ Strengthened the cultivation of high-quality seedlingstrains resistant to diseases and pests.

・ Strictly implemented planting and protection techniques
and forest monitoring to ensure scientific, effective, andtargeted control.

landscape-levelecosystems and・ Regulated the ecological environment to create anenvironment conducive to the survival of plants andpredators of pests to prevent and diseases and pests.

ecosystem mosaics

・ Maintained hybrid strains and tree species.

・ Developed a monthly disease and pest control calendar toenable early prevention and mitigation at the front lines.
・ Used drones to spray pesticides.

biodiversity

・ Purchased forest insurance.

ecosystems

High
Conservation
Value

culturaland habitats

basic ecosystemsignificanceservices

necessities of local
communities

47

APP China Sustainability/ESG Report 2022

Environmental: Creating a Picture of Green Development

Managing Environmental Footprint of Operations

source online monitoring system, and organizedtraining for personnel in charge to ensure theeffective operation of the new monitoring system.
Our mills have formulated their own emergency
plans for sudden environmental incidents in

In January 2022, Rudong Base integrated the company's environmental

Emergency Monitoring in Environmental Accidents

Occupational Health and Safety Management Manual in February for

and Environment, specifying the prevention, early

ISO14001 Environmental Management System focusing on factors suchaccordance with the Technical Specifications for

Our Commitment:
Adhere to the original intention of "green papermaking", continuously strengthen environmental impact and risk

management, comprehensively promote clean production, accelerate the transformation of energy structure, andactively build green mills by continuous optimizing our environmental performance.

(HJ589-2021) issued by the Ministry of Ecology

warning, emergency handling procedures, andresponse measures for sudden environmental
incidents, aiming to ensure environmental

5 mills awarded National "Green Factory"

Average industrial water reuse rate: 95%

RMB1.0117 billion in environmental investment

Comprehensive utilization rate of non-hazardous solid

Solar power generation: 31.0242 million kWh

waste: 99.37%

implementation. In June, Rudong Base conducted an internal review of its
as continuity, applicability, adequacy, and effectiveness to evaluation theimplementation of the system.

Rudong Base reviewed the operation of its environmental management

environmental emergency drills, which has been

Assurance, and Water and Environment, the progress towards achieving

included in their monthly SHE (safety, health andenvironmental) assessment. Hainan Jinhai Pulp
& Paper and Guangxi Jingui Pulp & Paper haveestablished an environmental risk early warning

system. When an emission indicator reaches the

set limit (lower than national emission standards),
relevant personnel will be notified immediately

Proportion of renewable energy: 25.63%

and safety management systems together, and released its Environmental/

safety with a scientific and effective emergency
mechanism. Our mills regularly conduct

Our Progress:

Rudong Base Conducted Environmental Management
System Review

via mobile messaging, prompting them to predict
environmental protection abnormalities tosystem in various departments such as of Environmental and Safety, Quality
its 2022 targets, the collection and implementation of relevant laws andregulations, and environmental protection awareness and skills training.

The review identified two general non-compliance issues and put forward
suggestions and requirements for their rectification, which had alreadybeen completed by relevant departments. In addition, various departmentsof Rudong Base also conducted a summary report analyzing theperformance of relevant environmental and safety management systems ofeach department.

reduce the possibility of environmental protection
accidents.

Environmental Management Mechanism
APP China mills strictly abide by laws andOur mills carried out environmental

recoverability, etc. Based on the summaryProtection Law of the People's Republicregarding their own production andand assessment forms from its departments,

regulations such as the Environmentalof China , and have all established andcontinued to enhance the environmental
management system based on the ISO

14001:2015 standard. Our mills ensure theeffective operation of the environmental

management system with the establishmentof dedicated EHS departments, formulationof environmental management manuals
that specify the responsibilities andauthorities of each department. Our mills
also organize environmental protection
law-related training and environmental

protection education activities regularly

to enhance employees' understanding of
the environmental system and relevant
environmental protection standards.

In 2022, there was no incident of major

environmental accidents at APP China.

48

risk identification and assessment

operations, established and implemented
environmental factor evaluation andcontrol procedures, identified therelevant environmental risk factors inanalysis on the environmental factor surveys
Rudong Base developed its own list of key

environmental factors, with a total of 17 key
environmental factors identified in 2022.

production management activities,

Regarding the wastewater, exhaust gas,

their environmental impact. Timely

have formulated relevant control procedures

products, and services, and evaluatedrectification of key environmental factors
had been implemented to control andmitigate the negative impact of harmfulenvironmental factors. Rudong Base

reviewed its environmental factors based on
the characteristics of the processes of eachdepartment, assessing whether they should
be categorized as key environmental factors

by evaluating factors such as their frequencyof occurrence, scope of impact, degree ofcontrol management, degree of impact, andwaste, and noise from production, our mills
and regularly carried out environmental
monitoring to ensure compliance with

relevant discharge and emission standards.
Hainan Jinhai Pulp & Paper upgraded its

pollution source monitoring system fromboth hardware and software aspects. In

hardware aspect, the company purchased
new pollution source online monitoring

equipment, and upgraded 2G mobile sim

cards with 4G IoT ones; in software aspect,
the company adopted the latest pollution

49

APP China Sustainability/ESG Report 2022

Environmental: Creating a Picture of Green Development

Energy and GHG Management

Transformation and

APP China continuously adjusts and optimizes its energy structure, eliminates outdated production capacity, accelerates the construction of green, low-

Upgrading of Energy-savingcarbon, and energy-saving projects, aiming to save energy, reduce carbon emissions, and increase efficiency through more efficient use of energy.

Technologies

APP China continuously promotes thein the production processes, such as theand emission reduction projects. Its mills

gas per paper machine. Hainan Jinhai Pulp

landing and application of energy-saving
have effectively improved energy efficiency
and reduced energy consumption in

production processes through energyEnergy Mix of Mills within Reporting Scope in 2022

GHG Emissions by the Mills within the Reporting Scope in 2021*

0.92%

To
ta

Sco
p

Purchased steam

Biomass fuels

Management System

Purchased electricity
Other

and intelligent transformation strategy

and green transformation strategy of APP
China, and have started building online

energy consumption and carbon emission
management systems to promote therealization of visualized management ofenergy use.

2

fC
O

Total emissions

Guangxi Jingui Pulp & Paper has established an Energy

The system is able to calculate supply plan of coal based

System (MES) to carry out real-time monitoring and statistical

automatically predict steam and electricity demand by

Management System (EMS) and uses a Manufacturing Execution

Scope 1

Scope 2

* As of the completion of this report, the GHG emission dataof most mills for 2022 were still being calculated. The scope ofdata covers Gold East Paper, Ningbo Asia, Guangxi Jingui Pulp &Paper, Hainan Jinhai Pulp & Paper, Hainan Gold Hongye, Hainan
Gold Shengpu, Shandong Base of Bohui Paper, and Jiangsu
Base of Bohui Paper. The carbon accounting at Ningbo Asia
was performed in accordance with the ISO 14064-1:2018 , whileother mills used the Greenhouse Gas Emissions Accounting
Methodology and Reporting Guidelines for Paper and Paper
Product Manufacturers (for Trial Implementation) issued by
the National Development and Reform Commission and the
Corporate Greenhouse Gas Emissions Accounting Methodology
and Reporting Guidelines for Power Generation Facilities issued
by the Ministry of Ecology and Environment.

Our mills have established their own

Base, Hainan Jinhai Pulp & Paper, Bohui

the procurement, storage, production,

the ISO50001 Energy Management Systemenergy management system that covers
distribution, and utilization of energy

in accordance with the requirements ofPaper, and Gold East Paper had obtained

All mills continuously strengthen their

Management in Industrial Enterprise (GB/energy-saving technologies, and regularly

T 15587-2009). All mills have an Energy

Management Committee to coordinate,plan, and arrange the energy management
activities of both the mill and its

departments, and conduct reviews of theirenergy management performance. The

committee also formulates and implements
energy performance improvement plans,and supervises the overall energy-saving
and emission reduction management ofeach mill. As of the end of 2022, Rudong

equipment. The company has also developed a production

consumption prediction model to monitor and automaticallyanalyze the consumption of water, electricity, gas (steam),coal, fuel, and materials in real time, aiming to realize optimalscheduling, balance prediction, and effective management ofenergy and resources.

on production parameters and inventory information,

inputting pulp and paper output plan into the steam andelectricity balance model, and track energy consumptionof each workshop in real time and remind them once theirenergy consumption exceeds the preset targets. In 2022, thecomprehensive thermal efficiency of Guangxi Jingui Pulp &Paper's power plant was 66%, up 8% year-on-year.

Reducing Steam Consumption with Upgraded Steam Hood Paper Machine
The unit steam consumption of the steam hood paper machine

was successfully brought down, and the waste heat recovery

conducted a detailed survey and analysis, and established aof steam per ton of paper produced, which was the equivalentat our Hainan mills was relatively high. In response to this, we

dedicated improvement team at the Company level. Througha number of improvement measures, such as repairing fanducts, increasing tiered-utilization of flash distillation, and gas

hood layout optimization, the heat loss of gas hood emissions

rate of condensate water was also improved, saving 0.26 ton

to reducing carbon dioxide emissions by 15,692 tons per year.

These technological upgrading measures had been applied to
12 steam hood tissue machines at our mills in Hainan, saving
over 120,000 tons of steam annually.

certification.

the Energy Management Systems (GB/T

23331-2012) and the Guideline for Energy

50

bringing down their energy consumption

analysis of energy consumption of major energy-consuming

Note: Biomass fuels include black liquor (accounting for
approximately 92%), wood chips, etc.; other energy sources
include gasoline, diesel, fuel oil, liquefied petroleum gas (LPG),
kerosene, solar energy, and purchased green electricity.

Building a Robust Energy

recovery of waste heat and waste energy,

other mills actively respond to the digital

e

pe
Sco

1:
8,0
so
93,371.95 ton

Natural gas

deactivation of redundant machines, and& Paper, Guangxi Jingui Pulp & Paper andGuangxi Jingui Pulp & Paper Significantly Improved Comprehensive Utilization Rate of Resources with
Energy Management System

10.44%

Coal

equipment transformation and upgrading,

e
O2
fC
2e
CO

47.66%

5.10%

such as process flow adjustment,

ns: 12,143,499.26 t
on
ssio
i
so
m
le
7
2
.
1
3
,
1
0
5
t
ons
0
,
4
:
of
e2

25.12%

10.76%

saving technical transformation projects

unit consumption of electricity, steam andtraining efforts on energy management andcarry out relevant awareness raising andtraining events. To further improve its

energy management performance, Hainan
Jinhai Pulp & Paper conducted energy

management training for mill managers,
energy management system managers,

and energy management technicians, etc.,

helping them solve practical problems andmanagement difficulties encountered in the

Energy savings from energy efficiency retrofits implemented in 2022:

Gold East Paper:

Guangxi Jingui Pulp & Paper:

Hainan Jinhai Pulp & Paper:

Hainan Gold Hongye and Hainan Gold Shengpu:

3,687 tons of standard coal/year
6,444.22 tons of standard coal/year

85,687.92 tons of standard coal/year

Ningbo Asia:

47,568.76 tons of standard coal/year

6,565 tons of standard coal/year

energy management process.

51

APP China Sustainability/ESG Report 2022

Use of Renewable Energy

Environmental: Creating a Picture of Green Development

Guided by the Company's "carbon peaking

biomass fuel sources. It plans to increasestrategy, our mills have been vigorously

per year. The company had also intensified

by 2030 and carbon neutrality by 2050"

promoting the use of photovoltaic power
and purchased green electricity, andstrengthening the efficient utilization of

biomass energy such as bark, wood chips,
and pulp residues to promote the green
and low-carbon transformation of theirenergy structure.

Gold East Paper has started theconstruction of Phase III of its 20MW

rooftop photovoltaic power station project,
expected to reduce GHG emissions by

11,637.43 tons of carbon dioxide equivalenteach year and generate an energy savingof 6,009 tons of standard coal. Ningbo

Asia was planning for the construction of

15MW photovoltaic power station project,
expected to reduce GHG emissions by

7,738.97 tons of carbon dioxide equivalent

its biomass fuel utilization to 400,000 tons

its equipment upgrading to strengthen thecapability to add biomass in fuels. Guangxi
Jingui Pulp & Paper has carried out abiomass particle blending test project.

In 2022, 142,083.5 tons of biomass suchas wood chips, pulp residues, and sludge
was blended and burned, an increaseof 63,760.7 tons compared with 2021,

and an increase of 81.41% year-on-year,

achieving annual energy saving of 19,301

tons of standard coal and carbon emission
reduction of 48,300 tons. In 2022, our mills
within the reporting scope used a totalof 3,516,670.13 tons of biomass fuels,

including black liquor, bark, wood chips,

roots, and pulp residues, up 10.46% year-

on-year, accounting for 25.12% among theenergy used.

per year and save energy by 3,867.45 tonsof standard coal.

Hainan Jinhai Pulp & Paper had

established its biomass root/branch

acceptance criteria, and actively exploredGold East Paper's rooftop photovoltaic power project

Solar power generation:

31.0242 million kWh,up 27.11% year-on-year

Proportion of renewable energy:

25.63%

Proportion of biomass fuel:25.12%

Product Carbon
Footprint Verification

APP China regards "reducing carbon

Bohui Paper. Carbon footprint certification

as one of the important interim goals ofcarbon emission data from the acquisition

intensity per unit product by 30% by 2030"
the Company's "dual carbon" goals. Our
mills subsequently enhanced the third-

party verification of the carbon footprint

throughout the whole life cycle of products.

Guangxi Jingui Pulp & Paper Obtained 210,000 Green Electricity Certificates
The green power trading mechanism is a systematic solution that uses market means to help achieve the "dual carbon" goals. It is an

important support for industrial enterprises and the society to achieve carbon neutrality, as well as a key starting point for the rapid andhealthy development of new energy. In 2022, Guangxi Jingui Pulp & Paper conducted green power trading through the Guangxi ElectricPower Trading Center, purchasing 211.22 million kWh of green power and obtaining 210,000 green electricity certificates, which was theequivalent to reducing over 600,000 tons of standard coal, and reducing carbon dioxide emissions by 138,665.93 tons.

In 2022, there were a number of products
obtaining the "cradle to gate" carbon

footprint certification, including the Breeze
Blossom Zero-carbon Floral Essence

Premium Roll Tissue and the VIRJOY zerocarbon tissue of Gold Hongye, the chemi-mechanical pulp and white cardboard paper

provides transparent and quantifiable

and transportation of main and auxiliary

raw materials, production and processingof products, to storage, packaging, andwarehousing at various stages, which canhelp our mills to identify energy-saving andcarbon emission reduction opportunities in

key links of the value chain, develop practicaland effective carbon emission reductionplans, and achieve better management ofcarbon emissions in the life cycle of our pulp
and paper products.

from Guangxi Jingui Pulp & Paper, andthe white ivory cardboard series, cultural

paper, and corrugated cardboard paper of

52

53

APP China Sustainability/ESG Report 2022

Environmental: Creating a Picture of Green Development

Wastewater Treatment Measures of Guangxi Jingui Pulp & Paper

Water Resources Management
APP China strictly implements national andmeasures such as adding white water filters

runner", among which, Guangxi Jingui Pulp

Law of the People's Republic of China, thereuse of condensate water. As a result, theGold East Paper were awarded as national

local laws and regulations such as the Water

Water Pollution Prevention and Control

Law of the People's Republic of China , and

the Water and Soil Conservation Law of theand twin-roll press, and the high-efficiency
water consumption per ton of product was
reduced by 15% compared to 2021.

"Water Efficiency Front-runner".

Bohui Paper, Guangxi Jingui Pulp &water resources management systems,

balance tests to measure the data of

Discharge Standard of Water Pollutants fordischarge, and water consumption andensuring the concentrations of all pollutants

including water conservation management
systems and water conservation target

accountability. Our mills have set up water
conservation management groups tocoordinate the comprehensive use of water
resources and carry out effective waterplanning and water conservation measures.
Our mills have been increasing the reuse ofPaper and other mills carried out water
water withdrawal, water use, waterobtain a comprehensive mapping of water
consumption to help identify water-saving

potentials of each operation link. They also
formulated feasible water-saving technicalplans to comprehensively improve theirwater-saving capacity and performance.

rainwater, reclaimed water, and workshop

In 2022, many APP China mills weresaving equipment and technologies,

industrial park-level "Water Efficiency Front-

white water through advanced water-

aiming to reduce freshwater withdrawal

recognized as national, provincial, orProcess
control

Our mills have formulated wastewater

People's Republic of China . The Company

has established and continuously optimizes

・ Organizing in-depth study of process theories& Paper, Hainan Jinhai Pulp & Paper, andto provide more precise guidance for
production

・ Recording and monitoring key processparameters daily

management procedures and treat thewastewater in strict accordance with the

Pulp and Paper Industry (GB 3544-2008),

Digitalized
operation

to meet the relevant discharge standards,
and even higher than national and local

standards. All mills continuously optimize

their wastewater treatment system, setting
up online monitoring facilities at discharge

Improvingproduction
management

outlets to monitor wastewater discharge in

Promoting
6S/TPM
management

real time. In 2022, APP China mills achieved

100% compliance with wastewater discharge

Enhancingpersonnel
capabilities

and improving water efficiency. In 2022, theaverage industrial water reuse rate of themills within the reporting scope reachedcontrol of process data from source todischarge

・ Using precise data to provide guidance forthe use of auxiliary raw materials

・ High-efficiency management of equipment

・ Digitalized display of operating process status ・ Digitalized equipment status monitoring・ Digitalized reporting of shift operation

・ Digitalized process monitoring

・ Implementing Total Production

・ Set clear accountabilities for equipment

・ Setting clear division of equipment

・ Fixed equipment monitoring and・ Digitalized feedback of abnormalities

Maintenance (TPM) management
environment and 6S areas

standards, with various indicators far below
the requirements of industry standards.

・ Applying coordinated management andcleaning

inspection

・ Organizing skills competitions, professional knowledge training, and emergency response
drills, to improve the comprehensive capabilities of employees

95%. In addition, our mills have tracked

and analyzed water consumption data todetect and repair abnormal situations in a・ Organizing communication groups fortimely manner to prevent running, emitting,abnormalities

dropping, and leakage.

In 2022, APP China Paper Business Unitestablished a cross-department skill

development activity to reduce water・ Setting warning values for discharge

consumption per ton of product, with stage

・ Conducting daily inspection of workshop

I and stage II reduction target set at 5% anddischarge outlet

10% respectively. The project also aimed to
improve white water reuse rate and reduce
the freshwater replenish need throughHainan Jinhai Pulp & Paper's wastewater treatment plant

・ Optimizing paper machines and pulp mill
shutdowns to achieve off-peak discharge

・ Reducing water pollution caused by loss andAlkali Recycling Project Put into Construction at Jiangsu Base of Bohui Paper
The chemi-mechanical pulp waste liquid comprehensive utilization project (also known as alkali recycling project) at Jiangsu Base of
Bohui Paper started construction in February 2022. The system sends the wastewater from the chemi-mechanical pulping process tothe alkali recycling workshop, where it is evaporated and concentrated before being burned in the alkali furnace, and then recovered

the alkali from the pollutants through a causticizing process. Once the project become operational, except for a small amount of waste
condensate water generated by the alkali recycling workshop, the chemi-mechanical pulp production line will no longer generate
external wastewater discharge, achieving nearly zero discharge of pulping wastewater, and it is expected to generate an annual
economic benefit of RMB185 million.

54

waste in production process

・ Recording discharge abnormal data
weekly・ Regularly reporting abnormal data

・ Monitoring the start and stop processesof pulp and paper production

・ Establishing a responsibility

mechanism for environmental

protection management and control

・ Properly utilize the function of
emergency pool・ Continuously carrying out regular inspections

・ Monitoring discharge status using thesampling tests on the discharge outlet into・ Integrating discharge abnormalities

・ Carrying out weekly inspections andthe ocean, and increasing the use of drones
for inspections, forming a management

mechanism that combines inspections, earlyDistributed Control System (DCS)
into shift handover checklist

Establishingabnormality
management
mechanism

Establishingabnormality
warningmechanism

Discharge
optimization
recommendations

Wastewater
discharge
supervision

Discharge
inspection
mechanism

warning, maintenance, and reporting

55

APP China Sustainability/ESG Report 2022

Environmental: Creating a Picture of Green Development

Indicator*

Unit

2022

2021

2020

Wastewater discharge per ton of paper produced (National standard ** limit: 20 tons)

ton

5.79

5.88

6.20

ton

9.60

12.46

12.50

kg

0.24

0.24

0.22

kg

0.60

0.86

0.85

Wastewater discharge per ton of pulp produced (National standard limit for pulp enterprises:
50 tons; national standard limit for pulp & paper enterprises: 40 tons)

COD emissions per ton of paper produced (National standard limit: 1.6kg)

COD emissions per ton of pulp produced (National standard limit for pulp enterprises: 5 kg;
national standard limit for pulp & paper enterprises: 3.6 kg)*Not including the data of Rudong Base.
**Discharge Standard of Water Pollutants for Pulp and Paper Industry （GB3544-2008）

Solid Waste Management
APP China mills strictly comply with the requirements of national laws, regulations and standards such as the Law of the People's Republic of China

on the Prevention and Control of Environment Pollution by Solid Waste , the National Catalogue of Hazardous Wastes, the Standards for Pollution
Control on the Storage and Disposal Site for General Industrial Solid Wastes (GB 18599-2020), and the Standard for Pollution Control Standard on

Hazardous Waste Storage (GB 18597-2001), and have formulated and revised relevant management procedures for non-hazardous solid waste andhazardous waste, specifying the classification, collection, storage, and treatment methods for non-hazardous solid waste and hazardous waste.

Adhering to the principle of "reduce, reuse, and resource utilization", all mills continuously intensify the resource utilization and comprehensive
utilization of non-hazardous solid waste such as fly ash, pulp residues, sludge, lime sludge, gypsum, wood chips, and slurry. In 2022, thecomprehensive utilization rate of non-hazardous solid waste at APP China mills within the reporting scope reached 99.37%.

Methods of Non-hazardous Solid Waste Disposal atEnergy Recovery from Solid Waste Incineration

Mills within Reporting Scope in 2022

Air Pollutant Management

0.29%

APP China mills continuously optimize their
exhaust gases management procedures
and strengthen the emission reduction

Ningbo Asia Built the "Odor-free Enterprise"

SO2, NOX, and soot in compliance with

In 2021, a new residential community was built near the paper machine workshop

Law of the People's Republic of China on

mill's boundary met relevant standards, the newly moved-in residents sometimes

management of exhaust gases such as

national laws and regulations such as the

44.79%
38.87%of Ningbo Asia's Phase II project. Although the odor examination results at thethe Prevention and Control of Atmospheric

Pollution , the Integrated Emission Standard

for Air Pollutants (GB 16297-1996), and theAmbient Air Quality Standards (GB 3095-

2012), etc. Gold East Paper has consistently

controlled the flue gas emissions of its power
plant at the ultra-low emission level. In April
2022, Gold East Paper began implementing

still complained about foul odors when the air pressure was low and the windblew towards the community. In response to this, the Beilun Branch of the

Ningbo Municipal Bureau of Ecology and Environment proposed that as people's
environmental awareness kept increasing, the existing standards for boundaryodor examination also need upgrading to address the concerns of residents innearby communities, suggesting the company to build a fresh mill by passing thesmell test.

environmentally friendly emission

Ningbo Asia actively prepared a customized "one mill, one policy" plan forconcentration of flue gas emissions from its

screening of relevant factors such as raw materials, production process, exhaust

reduction measures to further reduce thepower plant. In addition, the company also
upgraded the storage yards for coal, ore,

and wood chips, effectively reducing theemissions of unorganized exhaust gases.

Because of these effective efforts to reduce

emissions, Gold East Paper was recognized
as "Zhenjiang City 2022 Air Pollution

Prevention and Control Friendly Emission

Recycling and reuse

Selling to external parties for reuse

99.11%
Incineration

With energy recovery

Other

Without energy recovery

Note: "Recycling and reuse" refers to the recycling and reuseof waste through direct processing by APP China mills or
through special cooperation with third-party agencies, such as
making by-products from waste. Other disposal methods aremainly comprised of centralized treatment by local sanitation
departments.

becoming odor-free. Based on existing treatment measures and a thoroughpoints, and sources of odor, it was identified that paper machine drying exhaust

Developing Green Logistics

measures, including the source control of pulp auxiliary materials, adding

APP China actively develops green logistics and has built a smart transportation system focusing on new energy, new technology, newreplacement of white water with clean water to reduce odor during cardboard

rail, ocean-road, road-rail, and trunk line, and a "bulk-to-container" logistics mode, and achieving both cost savings and reduction of transportation

gas as the focus of treatment. The plan also suggested several other treatment

fungicides to white water to reduce the growth of microorganisms, increasing thedrying, and adding deodorants for terminal treatment. The plan passed the expert
review in September 2022. After the plan was implemented, the air quality in thesurrounding communities had been effectively improved, and the incidents ofReduction Advanced Unit".

0.89%

16.05%

management, and new models, optimizing logistics routes and increasing logistics efficiency with multimodal transportation, including oceancarbon emissions. Hainan Jinhai Pulp & Paper increased the loading capacity of containers, while Rudong Base reduced the dismantling of theentire batch of goods and maximized the proportion of full-pallet loading, aiming to effectively reduce shipment frequency and the corresponding
carbon emissions and other environmental impact of logistics operations. Bohui Paper implemented a project to switching from diesel forklifts tocomplaints also dropped significantly.

electric forklifts in 2022, effectively reducing the emissions of both air pollutants and GHG emissions.

Bohui Paper Encouraging Carriers to Use New Energy Vehicles
Exhaust Gases Emissions of Hainan Jinhai Pulp & Paper in 2022
Indicator

Permitted limit (ton)

SO2

2,983

Soot

878

NOx

56

5,303

Emissions in 2022 (ton)
182

2,586

197

Proportion (emissions in 2022 / permitted limit)
6.1%

48.7%

Bohui Paper actively encouraged its carriers to use vehicles

in the simulated shipping routes, providing the data foundation

2022, Bohui Paper conducted a tram trial operation analysis ofof the end of 2022, the proportion of energy-saving vehicles in

powered by natural gas, electricity or other clean energy. In

electric vehicles, which evaluated and analyzed indicators suchas vehicle mileage, power consumption, transportation speed

and technical support for the adoption of electric vehicles. As
fleet of some carriers of Jiangsu Base of Bohui Paper reached
20%.

22.4%

57

Social:Adhering to theOriginal Aspirationof Shared and Winwin Development
Employee Development and Cultivation

60

Product Responsibility

71

Health and Safety

Customer Relationship Management
Charity and Philanthropy andCommunity Engagement

65
73
75

APP China Sustainability/ESG Report 2022

Social: Adhering to the Original Aspiration of Shared and Win-win Development

Employee Development and Cultivation
Guangxi Jingui Pulp & Paper Carried out Employee Satisfaction Survey
To better understand employees' satisfaction and promptly

The survey results showed that the overall employee

Jingui Pulp & Paper conducted a company-wide employeescore of 82.06 out of 100. In response to the management

identify and rectify gaps in employee management, Guangxi
Our Commitment:
Fully protect the legitimate rights and interests of employees, establish clear career development paths, provide goodcareer opportunities and resources for employees to achieve their career goals, encourage employees to take ownership,and ensure active engagement and in-depth participation of employees in the Company's business development througheffective incentive mechanisms.

satisfaction survey in 2022. The survey focused on 32 indicatorsin 10 categories including job responsibilities, salary andbenefits, training, working pressure, and labor intensity. A totalof 2,077 online questionnaires were distributed, and 1,988 valid

questionnaires were collected, resulting in a valid questionnaire
return rate of 95.71%.

satisfaction in 2022 was relatively high, with a comprehensive
gaps identified, the company developed improvement plans

and implementation strategies for relevant departments andpositions to further enhance employees' recognition of thecompany, and continuously strengthen their sense of belonging
and cohesion.

Our Progress:
Percentage of female employees: 22.70%

Established a professional technical career channel,

Percentage of female employees in management:18.80%

career channel

Optimizing Career Development Path

73 positions provided for people with disabilities

upgrading process, the demand for technical

Proportion of positions filled by internal recruitment andinternal transfers: 52%

form a "dual channel" with the management

As APP China accelerates the industrial

with the management career channel. In

rotation opportunities, promotion based

talents grows significantly. In order tomills of APP China were promoted throughemployees in formulating personal career

promote the comprehensive development

A total of 1,052,512.80 employee training hours, up

and retention of technical talents, the39.77% year-on-year

Company established a professional and2022, a total of 203 employees from six major
the technical channel, greatly enhancing the
motivation of employees.

technical level assessment and development

In addition, APP China's mills support

career development path in combination

development through providing job

channel in 2022, forming a "dual channel"

employees to better achieve career

on a hierarchical system, and assisting newplans. In 2022, within the scope of the report,
there were a total of 2,486 positions opened,with 52% of them filled through internal
recruitment and internal transfers.

Implementing a Hierarchical Promotion Management System
In 2022, Guangxi Jingui Pulp & Paper started implementing a hierarchical employee promotion management system, strengthening

Employee Rights Protection
APP China takes the Labor Law of thequalifications, experience, performance,

established the Basketball Association,

Contract Law of the People's Republic ofcontinuously optimizes and improves

Association, Billiards Association, Etiquette

People's Republic of China , the Labor

China , the Civil Code of the People's Republicof China , and other relevant national andlocal laws and regulations as the basis forlabor relationship management. Adheringto the principles of equality, voluntariness,and consensus through negotiation,

APP China signs labor contracts with all

and capabilities. Meanwhile, the Company
employee welfare benefits; our mills provide

The performance

The performance assessment of junior and

The performance assessment of

actual conditions, including meal subsidies,

In addition, the Company actively listens

management is organizedgroup headquarters' Personal Performanceby each department. Eachinsurance, birthday gifts, wedding gifts,

and suggestions through organizing

high-temperature allowances, commercial

maternity leave, and employee dormitories.
The Company also regularly organizes

prevents any form of discrimination.

basketball games, tug-of-war competitions,

The Company provides employees withfive social insurances and one housing

fund, implements a salary system basedon job posts with salary levels based on
factors such as an employee's position,

60of outstanding backbone employees.

and Dance Association in 2022.

employees with various benefits based on

employees, prohibits child labor and forcedlabor, ensures equal pay for equal work, andBadminton Association, Table Tennis

the evaluation of employees' experience, capabilities, and performance while lowering the seniority threshold, and promoted a groupa variety of employee activities, such as
cultural performances, and artistic

flower arrangement activities for female
employees, etc., in order to promote a

better work-life balance for the employees.
To further enrich the after-work life of

employees, Guangxi Jingui Pulp & Paperand responds to employees' opinions
employee communication meetings,

employee representative conferences, andemployee satisfaction surveys, etc. In 2022,
Guangxi Jingui Pulp & Paper, Bohui Paper,Gold East Paper carried out employee

assessment of seniorand implemented by thegroup headquarters.

middle-level management is based on the

Objective Setting and Assessment (PPO)

Measures . Individual performance indicators
are formulated based on different job

results.

department formulates internal

assessment rules according to thecompany's Personnel Assessment

responsibilities, and employees are assessed

Management Measures , andperformance and overall capabilities.

management and annual

semi-annually and annually regarding theirsatisfaction surveys and formulated targeted
improvement measures based on the survey

grassroots employees is conductedcarries out monthly performancecomprehensive assessment.

Performance assessment results are an important basis for adjusting employees' post levels. By reviewing how employees haveachieved their performance objectives, the company works with employees to develop improvement plans to help them further clarify
their future career development direction and goals.

61

APP China Sustainability/ESG Report 2022

Social: Adhering to the Original Aspiration of Shared and Win-win Development

APP China's digital and intelligent

are familiar with our business scenarios totraining and coaching, in-person skills

stage 2.0, which posts an urgent need for

digitalizing business operations. In October

implementation of this project provides

Promoting the Construction of Highly-skilled Talent Teamtheir career development space and tap into

In order to upgrade the professional skills of technical talents

Officers from Municipal Human Resources and Social Security

talents, Ningbo Asia applied for and successfully obtained theensure fairness and impartiality in the evaluation process.

transformation strategy has entered thethe cultivation of relevant talents. While

introducing external training resources, we

also hope to cultivate internal trainers who

better address the practical challenges of2022, we officially launched the Digital

Intelligence Internal Trainer Development

Program, which included online live course

workshops, and rating certification, etc. The
employees with opportunities to broaden
more potential.

and promote the construction of a team of highly-skilled

qualification for recognition of senior technician vocational

We continuously improve our employee

development skills in all aspects. In

professional institutions and experts. We

training for employees at different levels

training resources, leveraging the role ofsharing activities, such as "Expert Sharing",

training system, providing diversified

and in different business lines, supporting
employees to enhance their professional

Expert Sharing

skill level for fitters and lathe operators at the end of 2021, andIn 2022, a total of 101 employees participated in the assessment

In 2022, Ningbo Asia carried out senior technician vocational

lathe operator, and electrician. Among them, 88 people passed

for electricians and boiler workers in July 2022, respectively.

Diversified Employee Training
2022, we integrated internal and externalinternal role models and managers whilestrengthening cooperation with external

Ignite Action

conducted various forms of training and"Ignite Action", and "Managers as Cultural
Navigators".

Managers as Cultural Navigators 2.0

skill level certification recognition for fitters, lathe operators,

and electricians among employees. The assessment consistedof a theoretical test and a practical assessment. Students wererequired to participate in a combination of online and in-person

knowledge training, as well as practical training and operational

skill competitions on specific topics carried out by the company.

live program. By regularly inviting

activity aimed at promoting theNavigators" to its 2.0 version thatknowledge-based light-sharing

internal and external experts withrich experience in management,

professional, technical and otheraspects, it shares content in the fields
of intelligent manufacturing, green

transformation, smart procurement,
IT technology, accounting

applications, etc. through online live

broadcasts, promoting employees toenrich their knowledge reserves andinnovating their thinking methods. In

2022, the program had a total of seven
live broadcasts, with an average ofover 5,000 viewers per session.

communication and interactive
sharing of outstanding casesand experiences across mills andbusiness units, encouraging the

APP role models to share their own

stories and experiences outside theirorganizations, and allowing high-quality experiences to be replicatedand the power of role models tobe promoted. In 2022, the "Ignite
Action" was carried out in Bohui

Paper, Guangxi Jingui Pulp & Paper,and Gold East Paper, with an averageof 100 participants per event.

upgraded the "Managers as Cultural

management with outstanding performance to participate in a

to cultivate the participants in both theoretical and practicalto the survey findings and launched a62

and learning, cultivating a group of departmental management

the program also invited senior management staff over thesupervisor level as lecturers and organized a series of lecturesalons from external experts.

year's event aimed to further empower

corporate performance management, and papermaking

APP management and support themon management skills, workplace communication skills,

Day Battle" program, with a total of 1,151 participants, each
their training assignments completed.

in achieving more breakthroughs inthe strategic transformation of thegroup's "Two Transformations and One
Exceptional" through key projects such

Implementing Employee Cultivation and Development Plan

as "Navigator Classroom", "Navigator
Training Workshop" and "Words of

In 2022, Bohui Paper formulated a special personnel training

the Crowd - Sharing of Managementand development plan based on the PM8 new paper machine
project. After two months of recruitment and selection, more

Experience".

than 100 people participated in the two-week theoreticaltraining offered by Qilu University of Technology, and 30

outstanding employees with active performance were selectedwith a summary and overall review of theteams. Regarding this, the Center referedsuccessful completed the program after six months of training

aspects. To expose the participants to different perspectives,

received 181 hours of training on average, and 220,000 words inguidelines proposed in 2021, thismills in 2022. The program was carried out

from managing themselves to managing

category of participants. The two classes, totaling 66 employees,

sessions, seminars, and new volunteer activities project, aiming

The training offered customized in-person and online courses

and found that all mills have training needs
management training during their transition

resources for the cultivation of technical talents.

the group. Based on the "8 As" action

management knowledge; and stage III

usually had urgent needs for systematic

certification qualifications to provide more opportunities andA total of 28 training sessions were organized for the "Hundred-customized training program for newly

for newly appointed supervisors, who

company will continue to expand the scope of technician levelbackbone and key personnel for the company.

targeting management at all levels of

The APP Learning and Development Center
conducted its annual training needs survey

skill level certificate, with a pass rate of 87%. In the future, theindustry trends, as well as activities such as experience sharing

sessions, a "Bootcamp Class" and a "Voyage Class", for each
In 2022, we comprehensively

the assessment and obtained the senior technician vocational

In order to better cultivate and build up talent reserves, in June
customized training program. The program offered two training
The "Ignite Action" is an in-personof senior technician vocational skill level in the fields of fitter,

Organizing the "Hundred-Day Battle" Customized Training Program

2022, Gold East Paper selected grassroots and middle-level"Expert Sharing" is an online

Bureau were invited to supervise the assessment process topromoted division-level supervisors of major
through a combination of in-person training
and online courses, which were divided into
three stages. Stage I focused on helping the
newly-promoted supervisors clarify theirroles and growth direction; stage II focusedon systematic training and practicing of

concluded the entire training program

training content. In 2022, the program was
implemented in Ningbo Asia, Gold East
Paper, Hainan Jinhai Pulp & Paper, andGuangxi Jingui Pulp & Paper, with a total of
120 participants.

to participate in external training. During the external training,

the Company assigned a teacher to each student to ensure thatthey can master the paper machine operational skills throughthe one-to-one learning mode of teachers and apprentices. The

lead supervisor was responsible for tracking the learning trendsof students and instructing them to make a weekly learning

summary. After two months of external training, the students

were well prepared for the PM8 new paper machine service with

Employees of Bohui Paper participated in training

a lot of job skills and practical experience.

63

APP China Sustainability/ESG Report 2022

Social: Adhering to the Original Aspiration of Shared and Win-win Development

Motivating Employee Participation and Innovation
APP China has established andincluding formulating a long-term talent

APP China encourages groupwide

evaluation system with effective

annual distribution ceiling for bonus. The

is innovative and everything can becontinuously optimizes its performance
employee performance evaluation

mechanism through methods such as

setting annual goals, revising goals, andconducting outcome assessment at the

beginning, middle, and the end of the year
respectively, and conducting performanceinterviews with supervisors. The annual
performance evaluation results will bereflected in annual bonuses, promotions,and salary raises for employees. In 2022,

we further optimized our incentive policies,

retention plan and setting maximum

amount of bonus over the ceiling will bebooked as long-term bonus for continuous

distribution to ensure a more balanced andlasting incentive effect of employee bonus.
In addition, we have formulated a variety
of programs such as talent retention

bonuses and equity incentive policies, toensure our incentive policies fully covering
senior management, middle and lower-

innovation with the culture of "Everyone
innovated". The Company actively

encourages employees to participate in thestrategic transformation of the Company,
organizing MBOS proposal competition
regularly, and promoting the sharing

and replication of outstanding proposals

internally through MBOS competition andregular achievement sharing sessions.

level management, and professional andtechnical talents.

In 2022, Hainan Gold Hongye and Hainan Gold Shengpu

quality improvement, equipment improvement, and process

employees. Among them, there were 18 outstanding proposals

recognition. This competition provided a communicationstood out during evaluation. In December 2022, these winningproposals, covering topics such as technological improvement,

Our Commitment:
Regarding protecting employees' health and safety as our top priority, we have established and continuously optimize robust
safety management mechanism, continuously strengthen safety management measures, ensure production safety, andactively focus on the prevention of occupational disease risks to fulfill the responsibility of occupational disease prevention
and control.

Our Progress:

Hainan Gold Hongye and Hainan Gold Shengpu Organized the 2022 Employee Proposal Competitioncollected a total of 2,328 improvement proposals from theirHealth and Safety

improvement, were publicly presented for sharing andplatform to encourage frontline employees to innovate andNumber of company-wide EHS surveys and inspections: 7

Number of emergency drills: 795

631,233.5 hours of safety training carried out in total, up
40% year-on-year

Average hazard rectification rate: 97.19%

Total investment of RMB10.5592 million in protective

year

gears, up 14.46% year-on-year

41.48% decrease in total lost worktime rate year-on-

accelerate the replication of best practices.

Safety Management Mechanism
Focusing on the principle of "safety first,

departments of various business units forcontinues to implement the APP China SHE

management" and strictly in complianceand operation control. Each mill has

specific regulations on the content andprevention-centered, and comprehensivewith national laws and regulations on safety,
health and environmental protection, APP
China has established a unified safety,

health and environment (SHE) management
system covering all workers, production

activities, and worksites, in line with relevantlaws and regulations such as the Law ofis responsible for operation control,development of standard operatingprocedures (SOP), implementation of SOPs,
on-site management, and regular audits.

In 2022, APP China revised the Procedures

format of regular meetings, ad hoc thematic
meetings, and year-end summary meetings
within the Company, aiming to facilitatesmooth communication and exchange on

SHE-related issues at our mills, analyze SHE
management performance, and follow up

on the formulation and implementation offor Project Safety Management and Control ,the People's Republic of China , and theprocedures for all construction projects ofIn order to establish a long-term mechanismof safety management system,

performance, in 2022, APP China launched

Emergency Investigation and Handling

Measures for Environmental Incidents , etc.

The Company has established a sound SHE
organizational structure to ensure robust

safety management. The system is led by theManagement Committee at the company
headquarters for strategic planning. The

headquarters SHE Department formulates
policies and coordinates with the EHS

64

established an EHS department, whichgroup meeting program, which provides

the People's Republic of China on Work

Safety , the Emergency Response Law of2022 Employee Proposal Competition of Hainan Gold Hongye and Hainan Gold Shengpu

inspection and audit, system construction,

which stipulated the safety management

the Company, including the establishment
implementation of "three simultaneous"requirements (i.e. simultaneous design,

construction, production and use), safety
education and training, hazard source

identification and risk assessment, audit

and inspection, accident investigation andhandling, etc. Meanwhile, the Company

countermeasures regarding major issues.
for continuous improvement of SHE

a company-wide MBOS competitions

around key indicators such as fatalities,

government administrative penalties, total
lost worktime rate, injury severity rate,

fire incident rate, and occupational healthabnormality rate, etc. The indicators of eachmill were released publicly on a quarterly

65

APP China Sustainability/ESG Report 2022

Social: Adhering to the Original Aspiration of Shared and Win-win Development

basis, so as to encourage the mills tozero occupational disease, zero major

Our mills have been actively promoting

weaknesses in management and adjust

the implementation of monthly safety

production safety into their enterprise

improve their SHE performance by analyzing
management strategies accordingly. As ofthe end of 2022, the Company recognized
outstanding mills based on their annual
indicator performance, and rewarded

bonuses and honorary certificates to mills

with outstanding achievement rates and noserious abnormality.

APP China's mills set annual production
safety targets, including zero severe

injury, zero fatality, zero fire incident,

production safety accident hazard, andtraining and safety inspections. To achievethese targets, our mills strengthened theirsafety performance appraisal, carried out

monthly appraisals, and took corresponding
rewards and disciplinary measures basedon appraisal results, aiming to continuously
improve the awareness of production
safety among employees with theappraisal mechanism that included safety

performance in the performance appraisalof employees.

the integration of standardization ofsafety management system and enterprisestandardization initiatives, aiming toStrengthening Safety Risk Management
Cultivating a Safety Culture

and skill training, safety accident warningon safety, including safety training forand special meetings on production

awareness-raising and training activities

ensure the implementation of each mill'smanagement staff and case studies ofmain responsibility of production safety

response measures for typical SHE injury

management by achieving full-processincidents, etc., to continuously improverisk prevention and control and realizing

the safety awareness of all employees andtraceable and scientific control procedures.

cultivate a safety culture. Our mills also

As of the end of 2022, Ningbo Asia, Gold East

continuously strengthen safety education

Paper, Guangxi Jingui Pulp & Paper, Rudong

with various measures and help employees

Base had passed relevant rating reviews on

at all levels to build a strong defense of safety

standardization of production safety.

Focusing on Systematized Management and Promoting Standardization of Safety Production

APP China Headquarters regularly organizes

awareness, including safety awarenesseducation, safety knowledge competition,
safety, striving to lay a solid foundation

for the Company to strengthen safety risk
management and control, and improvesafety hazard management and the capacityof emergency incident handling. In 2022,

a total of 631,233.5 hours of safety training

were collectively recorded at the mills within
the reporting scope.

Enhancing Employee Safety Awareness with Safety Culture Activities

Rudong Base has formulated a series of production safety

System , and the Safety Warning Sign Management System , andIn 2022, Guangxi Jingui Pulp & Paper organized a number of safety cultural activities to effectively cultivate safety awareness among

regulations such as the Guideline of China Occupational Safety

effectively improve its production safety level by strengthening

communications via its internal publications.

management systems in accordance with relevant laws andand Health Management System , including the Environmental

Operation Control Procedures , and the Production Safety

Rewards and Disciplinary Management System ,and the Special

Equipment and Special Operation Personnel Management

the Incident and Accident Management System, etc ., aiming torisk management and process control with standardized,

scientific, and systematic production safety management.
In 2022, Rudong Base successfully passed the third levelproduction safety standardization rating review of Nantong City.

employees, including safety training, pre-shift safety meeting system, employee safety knowledge competition, and safety culture

Safety knowledge
competition

Employee safety training

Pre-shift safety meetingsystemSafety culture cultivation

Organized case studies on

Each department gave pre-Organized the "Workplace

During the Safety Monthlessons and achieve effective

employees through pre-shift

Awareness Month"of 32 safety knowledge

safety accidents to learnsafety warning education

result. A total of 26 training
sessions of various types

were organized throughout
the year.

shift safety briefings tomeetings and safety tip cards
to ensure that employees

start their shift with sufficientattention to safety.

Safety Month" and "119activities, published safetyrelated articles in internal

publications, and distributed
safety brochures and safety
magazines to cultivate astrong safety culture.

event in June, a totalcompetitions wereorganized with 1,320

employees participating in.
In addition, the company

also organized its employees
to compete in theknowledge contest activities
on the new Production

Safety Law of the Guangxi
Autonomous Region.

APP China Forestry Carried out Technical Training on Chemical Safety
In order to effectively prevent and control major safety risks involving hazardous chemicals and prevent the occurrence of related
safety accidents, in September 2022, APP China Forestry Guangxi BU carried out a special technical training on chemical-related

production safety management. The training focused on the content of the Chemical Safety Technical Specification that the company
compiled based on relevant information from international organizations such as the International Programme on Chemical Safety,
the International Agency for Research on Cancer, and the OECD Global Chemicals Information Platform. Employees improved their
High-end Tissue Base of Rudong Base

66

knowledge level of chemicals by learning about the composition and hazards, emergency measures, fire prevention measures,

emergency response to leaks, storage, and disposal of chemicals, which helped ensure the safety of forestry production operations.

67

APP
APP China
ChinaSustainability/ESG
Sustainability/ESG
ReportReport2022
2022

Safety Hazard and Emergency
Management

Social: Adhering to the Original Aspiration of Shared and Win-win Development

APP China has established and implements
a dual prevention mechanism for safety risk
classification and control, as well as safety
hazard identification and rectification inaccordance with relevant national and local
laws and regulations such as the Work Safety
Law of the People's Republic of China , aiming
to eliminate production safety hazards in atimely manner. In 2022, our mills vigorously
carried out safety hazard identification,
special safety inspections, and pre-holiday
safety inspections, etc., and adopted targeted
rectification measures to manage andcontrol safety hazards and build a solid line ofdefense for production safety. Guangxi Jingui
Pulp & Paper started the construction of thedual prevention mechanism in 2022 throughformulating specific implementation plansof the mechanism construction, improving
and revising the Administrative Measures for
Safety Risk Hierarchical Management and
Safety Hazard Identification , identifying andinspecting key risk points, and strengthened
hazard source evaluation and risk control,
aiming to comprehensively improve the risk
management and hazard identification andrectification capabilities of the company,
and achieve the scientific, digitalized, andstandardized prevention of accidents. In 2022,
the average hazard rectification rate for all
mills within the reporting scope was 97.19%.

In 2022, APP China Headquarters conductedseven EHS surveys and inspections on theidentification and management of risk andthe detection and rectification of safety
hazards of all mills. Each mill was required
to follow the rectification suggestions
and receive follow-up inspections, so as
to implement their main responsibility of
EHS, form closed-loop management of
production safety, and ensure the effective
elimination of production safety risks andsafety hazards.
Our mills continuously optimize emergency
management measures, take actions toimprove emergency handling procedures,
build a regular emergency drill mechanism,and enhance employees' emergency
response and handling capabilities for
fires, oil spills, workshop forklift accidents,
steam explosions and other emergencies.
In 2022, a total of 795 emergency drills wereconducted at our mills within the reporting
scope. Experts from APP China Headquarters
observed the emergency drills of sevenmills, and put forward suggestions for
improvement based on problems identified,
which helped to further promote thestandardized management of emergency
drills.

Contractor Safety
Management

In recent years, APP China has been working

Law of the People's Republic of China , ourDue to the high mobility of contractor

agreement with contractor to clarify thewith an increasing number of contractors.
employees and the great variation in theirsafety awareness and operational standards,
the Company continuously works toenhance contractor safety management andintegrate contractors into the Company's

SHE management system, ensuring effective
supervision of the safety managementof contractors with requirements in ten

aspects, including eligibility review, signingof safety management agreement, safety

training and safety notification, contractor
meeting, management of high-risk

operations, safety inspection and safety

hazard identification, safety performanceassessment, and accident reporting, etc.

Our mills actively implement the regulationsof APP China Headquarters regarding

safety management of contractors, andhave formulated and continuously improverelevant safety management measures ofmills sign a production safety management
contractor's responsibility regarding safety

management mechanism, safety inspection,
safety education and training, and safety

protection, etc. before the contractor starts

operations, and urge the contractor to strictly

follow the safety management agreement toensure the compliance and safe operations
during the contract period. For contractors

work at our own mills, each mill will provide
them with the necessary safety training

before they start, and only those who pass

the training assessment can have access toworking at our mills, aiming to enhance thecontractors' awareness of production safety.
During their service at our mills, each millcontinues to implement the requirementsof contractor safety management on

regular basis with measures such as regularcontractor meetings, contractor assessment,
and special inspections.

contractors. In accordance with relevantlaws and regulations such as the Work Safety

Hainan Jinhai Pulp & Paper Strengthened Contractor Safety Management
Bohui Paper Continuously Launched the "I'm a Safety Personnel Today" Campaign

Hainan Jinhai Pulp & Paper had implemented a series

notification regarding the issues founded and requires

Safety is seen from the tiny subtleties, and theparticipated in the activity, carefully investigated the safety

Contractor Safety Management Measures to effectively

organizes monthly meetings for project leaders and safety

hazards depend on the joint engagement of all employees.

By the end of 2022, a total of 305 safety violations had been

Before a contractor passes the eligibility review, its safetycomprehensive investigation and management of safety
Bohui Paper launched the "I am a safety officer today"
activity in December 2021 to create an ideologicalatmosphere of "everyone is responsible and everyone ispromising" for production safety. All employees actively

68

hazards in their positions, and supervised safety violation.

detected in the activity, with the rectification rate exceeding
99%, achieving good results in hazard prevention andcontrol.

of management measures such as formulating its

prevent the occurrence of contractor safety accidents.

management status will be reviewed together with otherinformation and any non-compliant items have to berectified accordingly. Each month, the company carries

out safety inspection of contractors, and issues a formal

their rectification within certain period. The company

leaders of contractors to report their safety performanceof the previous month and conducts case studies ofaccidents. Contractor personnel with violations will be

required to rectify and receive disciplinary actions basedon management protocols.

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APP China Sustainability/ESG Report 2022

Social: Adhering to the Original Aspiration of Shared and Win-win Development

Occupational Health Management
In compliance with the Law of the People's

requirements to effectively fulfill theirOccupational Diseases , lectures on theControl of Occupational Diseases anddisease prevention and control and reduce

diseases and chronic diseases, introduction

Republic of China on Prevention andthe Employer's Occupational Health

Surveillance Measures On The Supervision ,APP China has formulated its own Codeof Occupational Health Management andestablished a management system with theSHE Department of APP China Headquarters
in charge of the overall management, EHS
departments of business units conduct

regular guidance and audit, and the EHS
department of each mill manages theirown occupational health-related issues.

In 2022, the Company updated the Codeof Occupational Health SurveillanceManagement and further elaborated onsome of its requirements.

In compliance with the ISO45001
Occupational Health and Safety

main responsibility on occupational

occupational hazards. The measures
include establishing and optimizing

occupational disease management system,
organizing regular occupational healthexaminations, conducting occupational
disease impact evaluation, organizing
occupational hazards prevention andcontrol training, distributing personal

protective equipment, implementing thelaw, and online quiz on occupational healthknowledge, to strengthen employees'

awareness and prevention of occupational

hazard factors. In 2022, our mills also actively
organized regular occupational healthtraining, such as training on occupational

disease prevention and control law, healthtips for high temperature, noise protection

Our Commitment:
We are committed to providing high-quality products for customers and consumers by focusing on full life cycle quality

control, deeply implementing total quality management, and accelerating the development of a green product management
system.

Our Progress:

main project designed, constructed andHainan Jinhai Pulp & Paper and Guangxi

Continued to implement total quality management and encouraged the participation of all employees in improving

disease reporting, etc. In 2022, there was no

institutions to inspect their workshops formeasures must be simultaneous with theput into production), and occupational

occupational disease incident occurred inunits within the reporting scope.

and Control of Occupational Diseases ,Prevention and Control of Occupationallaws and regulations, our mills implementof activities, such as special training on

various occupational health management

to the occupational diseases prevention

knowledge.

workplace safety, health and noise control

The period from April 25 to May 1, 2022 wasand other relevant occupational healthprevention and treatment of occupational

knowledge, and respiratory protection"three simultaneous" requirements (i.e.

Management System, the Law of thePeople's Republic of China on Prevention

Product Responsibility

the 20th awareness week for the Law on

Diseases . Our mills organized a series

the Law on Prevention and Control of

Jingui Pulp & Paper contracted third-party

product quality

occupational hazard factors such as toxic

Applied lean management system to strengthen product quality control

high temperature, noise, and other physical

Focused on the development of a green product management system to ensure that products meet all health, safety, andand harmful chemical factors, as well asfactors, to accurately identify occupational
hazards in workshops and take relevant

environmental standards and requirements

measures to mitigate and control them.

Guangxi Jingui Pulp & Paper was recognized
the title of "Qinzhou Health Enterprise" in
2022.

Hainan Jinhai Pulp & Paper Organized Free Health Consultation for Employees

APP China mills have established and continuously keep optimizing their respective quality management systems and related management policies
and procedures in accordance with the ISO9001:2015 Quality Management System Standards. To continuously provide our customers with highquality products, we have formulated and strictly implement a quality management mechanism that runs through the entire product life cycle,

spanning from material procurement, manufacturing, and finished products, to sales, including raw material control procedures, inspection control

In June 2022, Hainan Jinhai Pulp &procedures, product identification and traceability control procedures, unqualified product control procedures, potentially unsafe product control

Paper brought in experts fromprocedures, etc.

Hainan Cancer Hospital to provide

health consultation for employees.
Doctors and experts in the fields ofcardiology, endocrinology, urology,
osteology, oncology, traditional

Chinese medicine, and gynecology

provided diagnostic consultation for
the employees. The employees also

had blood glucose tests, thyroid color

Doppler ultrasound examination, andother diagnostic procedures on-site.

Free health consultation for employees at Hainan Jinhai Pulp & Paper
In September 2022, the "Breeze" brand won the "2022 Annual Craftsmanship Product in China Tissue Industry"

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APP China Sustainability/ESG Report 2022

Social: Adhering to the Original Aspiration of Shared and Win-win Development

Our mills actively implement total quality

organized 53 large-scale quality training

strengthen the management of the green

strengthen the efforts to involve allreceived training in standardization

development and certification requirements

management (TQM) and continuously
employees to participate in quality

management. In 2022, Gold East Paper
upgraded its back-end inspection

sessions, with more than 1,600 employees
advancement process, autonomous
inspection, quality awareness, etc.

procedures for product quality, relying onWith the progress of digital and intelligent

highlights upstream quality inspectionslean management systems, which

the TQM quality management system thatfrom downstream upward. Downstream

units were encouraged to identified issues
in product appearance from upstream

units for improvement. The Company also

implemented a number of other measures
to ensure the timely improvement ofquality abnormalities, such as setting up akanban management system for productappearance and quality, and forming ateam led by supervisors for end-of-monthwarehouse quality review, etc. Bohui Paper
had established a quality accountability
system for each section, and actively

organized activities such as experienceexchange and skill competitions totransformation, our mills have implemented
can automatically collect and record

inspection data, promptly identify andhandle unqualified products and quality

abnormalities in the production process,and build correlations between the batch

numbers for products in production, underinspection, and as finished products. With
this complete set of complete and quick
access to information on each batch of
products, our mills are able to achieve

total management of product quality byeffectively overcoming the challenges ofdifficult statistics and analysis of manual
recording of product quality.

continuously improve employees' product

Our mills also actively focus on theGold Hongye and Hainan Gold Shengpu

management system and continuously

quality management capabilities. Hainan

development of a green productattributes of raw materials. Based on the

Customer Relationship Management

for green products design, Gold Hongye

Paper has developed specific requirements
for suppliers of raw materials, such as pulp,
non-woven fabrics, adhesives, chemicals,

inks, and wallpaper substrates, etc., in the
aspects of toxic and harmful substancecontent of raw materials, chemical content
indicators, clean production and energy

consumption, and health and environmental
protection requirements. In addition, key
suppliers are required to pass relevant

certifications related to green products, such

Our Commitment:
We are committed to adhering to a customer-oriented approach, maintaining smooth communication with customers,

actively collecting and understanding customer feedback, and using technical exchanges and on-site technical services toprovide customers with high-quality service experience.

as forest certification, RoHS certification, as

Our Progress:

management system certifications. Bohui

Held 32 sessions of "Little A Classroom", reaching over 700 audiences

to conduct annual product inspections

Continued to conduct customer satisfaction surveys and actively promoted improvement

well as ISO9001, ISO14001, and ISO45001
Paper entrusts third-party testing agency
regarding RoHS, SVHC, ozone depleting

substances, and other prohibited substances
to ensure that its products meet relevant

health, safety, and environmental protection
standards and requirements.

Over the years, we have been continuously

In 2022, APP China BUs conducted annual

conducted a survey to learn about customer

customer complaints. Through organizing

aimed to understand customer feedback in

A Classroom" event. Based on customer

strengthening the tracking and handling ofdiscussions on the causes of customer

complaints, developing corresponding
improvement plans, conducting onsite visits and surveys of customers,

and enhancing on-site audits of various

production processes, we have deployed

and implemented more targeted solutions
for handling customer complaints, andcontinuously optimize the efficiency
and quality of customer complainthandling by monitoring and evaluating

the handling process as well as the effectof improvement. Meanwhile, we aredimensions such as product quality, sales

service, logistics service, technical service,

and information service and analyzed andsummarized the trends in satisfaction

scores. Meanwhile, issues identified during
the survey were promptly rectified withfollow-up reviews. In addition, our BUs

maintained active communication withcustomers through regular customer visits
and inviting customers to make field trips

to the Company, so as to better understandtheir needs and expectations.

committed to implementing our service

Since 2018, Paper Business Unit hascustomers solve various issues arised with

communication event "Little A Classroom",concept of "Customer First" and helping

the use of paper products through a variety

of means, such as remote technical support,

on-site technical support, and strengthening
proactive services.

72

customer satisfaction survey. The survey

needs before launching this year's "Little
needs, the event focused on conducting

in-depth exchanges with the personnel ofthe procurement, technology, production

and other departments of customers over
the topics of product characteristics, newproduct introduction, production process,printing and post-processing technology,

and scientific paper use technologies, etc.

Customer feedback was collected after the
event for further optimization of the event

content. In 2022, Paper Business Unit hosted

a total of 32 "Little A Classroom" events, with
an audience of more than 700 people.

been continuously holding the customer
which provides customers with not only
in-depth knowledge of our products,

but also industry trends and technicalknowledge and tips on the use of paper
products. In 2022, Paper Business Unit

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APP China Sustainability/ESG Report 2022

Social: Adhering to the Original Aspiration of Shared and Win-win Development

Empowering Customer Service Management with Digitalization
Guangxi Jingui Pulp & Paper takes a variety of digital intelligence measures to enable the customer service post-sales stage

Charity and Philanthropy andCommunity Engagement

and effectively improve their customer experience.

Establishing customer
service database

Established a customer
database withprofessional digitalsystems to record theneeds of customers,
equipment conditions,and other information.

Building a comprehensive
knowledge baseCategorized frequently
asked questions
regarding paper andtheir solutions, productfeatures, and productmanuals, printing
techniques, andprecautions for unloading
paper products, etc. into
a series of documents
under relevant topics
and upload them to an
online knowledge base,supporting the personnel
to efficiently find thesolutions for customers.

Initiating proactive
promotion

Communicated actively
with customers about
the methods to deal withthe most commonlycomplained problems,such as bursting anddelamination, using
channels such as "Little
A Classroom", WeChat
moments, customer
communication social
media groups, technicalexchange activities,
and one-to-one
communication, etc., toeducate our customers
on ways to avoid risks
in advance and on
improvement measures incase of such problems, andminimize losses for bothcustomers and the mill.

Our Commitment:
Analyzing customer

complaint indicators
Conducted statisticalanalysis through thebackstage online system
on customer complaint
indicators, such as
customer complaint
settlement amount,number of customer
complaints, customer
complaint rate, closing
rate, and average timeof customer complaints
handling, etc., to urge
the mill to improve
paper product problems,stabilize the quality of
paper products, andimprove customer
satisfaction.

Adhering to our original aspiration of charity and philanthropy, we have integrated our charity and philanthropy mission,
which is to "help the frail, the needy, the elderly, and the young, and build a harmonious society", into our business

operations and development, and continuously contribute to the harmonious development of society by actively supporting
community development and engaging in public service in the areas of education support, national development, andpoverty alleviation.

Our Progress:
APP China has donated close to RMB1.3 billion incharitable giving cumulatively in China

The "Dream Plan" charity projects recruited 90 new

Our Foundation implemented 29 charity projects, with a

Employee volunteer hours: 30,348 hours

total donation of around RMB137 million

students, with a total enrollment of 179 students

Continuously Expanding the Field of Charity projects
Huang Yicong Foundation (referred to as

as a new focus area, and started exploring

providing long-term support for promoting

projects.

"the Foundation") has been focusing on
equity in education, supporting youth

the implementation of "carbon neutrality"

development, and assisting medical and

The rural revitalization projects wereactively participates in the charity areas

Sustainability Roadmap: Vision 2030, which

research advancement. The Foundationof education support, poverty alleviationand disaster relief, provides assistance tocharity projects beneficial to national andsocial development in the fields of scientificresearch, culture and sports, medicalcare, and environmental protection,

supports major development projects andresearch of the country, and promotes thedevelopment of philanthropy. In 2022, theFoundation added "rural revitalization"

mainly implemented around one of APP'sis to "improve the lives of millions", aiming
to carry out rural revitalization practices

through measures such as developing local
industries, cultivating new agriculturalbusinesses, and improving the efficiency

of agricultural industry chains, so that the

Scan the QR code to see moreof the Foundation's practices

development results of enterprises could
benefit local communities and farmers,

and promote the advancement of China's
rural revitalization strategy.

2022 "Little A Classroom" Event

74

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APP China Sustainability/ESG Report 2022

Social: Adhering to the Original Aspiration of Shared and Win-win Development

Part of Key Charity Projects of the Huang Yicong Foundation

Golden Orchard Program

Sunshine Preschool

The Foundation actively explored forest economy inthe "Sunshine Preschool" Project in remote rural areas of Yunnan. The project provides preschool education for children aged three torevitalization project of Xinfeng Golden Orchard Program inaccordance with the sustainability strategy of the Company,

Since 2014, the Foundation has been collaborating with non-profit organizations specializing in early childhood education to implement
thereby promoting long-term development of local communities and helping them prosper. As of the end of 2022, the Foundation had
supported 185 preschool classes in Ximeng, Funing, Lancang and Honghe in Yunnan, with a total of 4,316 children enrolled and 1,455
children graduated.

One Plus One Matching Fund

The Foundation launched the One Plus One Matching Fund project in 2012. APP China employee volunteers make monthly donations
to provide financial assistance to primary and middle school students from impoverished families. Meanwhile, the Foundation also

Ganzhou. The project conducted field studies in 2022, andRural Revitalization

Promoting Equity in Education

six and helps local communities cultivate their own early childhood teachers and develop suitable early childhood education models,

and took the lead in donating fund to support the pilot ruralplans to start construction in 2023. In the future, this projectwill cooperate with local farmers' cooperatives in Xinfeng

to develop a specialty navel orange industry that integrates

industrial ecological chains such as picking, deep processing,sightseeing, leisure, and culture and tourism, aiming to create
employment opportunities for local communities, accelerate
the growth of rural collective economy, and support local

farmers' income generation. Based on preliminary calculation,

provides matching fund to support school construction and development. As of the end of 2022, the project had donated a total of

by contracting production to farmers, this program is expected

approximately RMB2 million, provided financial assistance to 1,692 students in remote areas, and carried out a total of 20 supporting

to benefit 2,620 farmers cumulatively over a four-year period,

projects, such as individual assistance and relief cases, renovation of school facilities, and donation of books and musical instruments.

Huang Yicong Scholarship

Since 2002, APP China has established scholarships at multiple universities across China for students with outstanding academic
performance and remarkable achievements to cultivate young talents. In 2011, the Foundation started including "charity andSupporting Youth Development

philanthropy" as an element of the project, adding a new requirement on the applicants' participation in charity activities, aiming toencourage college students to actively pay attention to and participate in charity and philanthropy. In 2019, the Foundation established"Huang Yicong scholarship" in Huaqiao University and Chinese Academy of Forestry for young talents with not only outstanding moral

and academic performance, but also significant charity contributions or scientific research achievements. The Foundation has also been
cooperating with partnering universities to explore more diversified programs to in-depth cultivate young talents. As of the end of 2022,
a total of 2,616 students were awarded scholarships, with a total amount of approximately RMB7.4 million.
Yicong InternshipThis program encourages college students to apply for summer internships at local non-profit organizations, allowing more college

students to have the opportunity to understand the operation of charitable organizations and charity projects and discover different life

values with this experience. Since its launch in 2010, this project has been successfully launched for 12 consecutive sessions in Shanghai,
Nanjing, Beijing, the Pearl River Delta, Chengdu, Wuhan, and Tianjin. Over the past 12 years, a total of 558 outstanding college students

have been selected as "Yicong Interns" and completed their internships with excellent performance, attracting attention from the charity
sector.

with an average income increase of RMB14,100.

The Dream Plan
Since its inception in 2018, the "Dream Plan" program has set

had already secured formal employment opportunities and anotherIndustry, Nantong Vocational University, and Zibo Vocational Institutewill continue to expand the breadth and depth of school-enterpriseup joint classes with Guangxi Vocational & Technical Institute ofon mechatronics and electrical automation. The program also

cooperated with the College of Light Industry and Food Engineeringof Guangxi University, Zhejiang University of Science and Technology,
and Qilu University of Technology to offer courses on pulp-making

and papermaking. Students participating in this program are awarded

Assisting Medical and Research Development76

In accordance with the healthcare reform policies of the country and Shanghai, the Foundation has committed to donate RMB100

million from 2022 to 2025 to support Geriatric Medicine Center (Institute) of Ruijin Hospital to systematically carry out cooperation in
high-level research, promote the development of geriatric medical disciplines, and cultivate outstanding clinical professionals andnursing talents in this field, so as to comprehensively cultivate elite health talents, strengthen medical collaboration and communication,and promote the high-quality development of services for the elderly. This project donated a total of RMB40 million in 2022.
Supporting Tsinghua University's Research on Carbon Neutrality and Green Finance

The Foundation has committed to donate RMB20 million to the Tsinghua University Education Foundation from 2022 to 2026.
The funding will be used to fund the research work of the Institute for Carbon Neutrality of Tsinghua University on key carbon
neutrality technologies, series of authoritative reports releases and talents cultivation, and accelerate the development ofcarbon neutrality policies and technological innovations. In 2022, the program donated a total of RMB4 million.

66 students were doing internships. In the future, the "Dream Plan"

cooperation, supporting students to receive systematic education in
papermaking theory and practice, benefiting both the students byhelping them realize their dreams and the papermaking industry bycultivating more applied talents for the industry.

a scholarship to cover their tuition and accommodation expenses, andan allowance to cover part of their living and transportation expenses.
APP China provides with employment opportunities upon theirgraduation.

In 2022, the fifth "Dream Plan" program was launched in Guangxi

and Shandong, with a total of 90 students selected from village andtownship middle schools in remote areas. As of the end of 2022, there
were 179 students enrolled in the "Dream Plan", with 84 students

Geriatric Medicine Center

Local farmers working in the navel orange orchard

The opening ceremony of 2022 "Dream Plan"

In 2022

Bohui Paper cooperated with Qilu University of Technology andZibo Vocational Institute to provide full scholarships for 30 highschool graduates to participate in the "Dream Plan" program.
Gold East Paper implemented the "Dream Plan" program withthe coordination of APP China Headquarters, arranging for ten
students from the Guangxi Dream Plan class to participate in a
one-year on-the-job practical training at Gold East Paper.

Guangxi Jingui Pulp & Paper launched the "APP Class Dream
Plan" summer internship program. The Human Resources
Department worked together with the Pulp Production

Department, the Paper Production Department, and the
Pulp and Paper Engineering Department，formulatinga detailed internship plan to help the interns fit in thecompany, further consolidate professional knowledge andfamiliarize specialist skills. There were 56 students from the2021 APP Class participating in this internship program.

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APP China Sustainability/ESG Report 2022

Social: Adhering to the Original Aspiration of Shared and Win-win Development

Supporting Community Development
Cultural Dissemination

Community Communication

Ningbo Asia's Green Paper Culture Center opened in April 2021.

Ningbo Asia organized 22 "Harmonious Community" activities in 2022,

Visitors could systematically learn about the history of paper making

in special actions on community grassroots governance, donating

Since then, it has already hosted 103 visits totaling over 1,100 visitors.
and APP China's green and low-carbon practices here. They also had

the opportunity to participate in a manual-papermaking class to makepaper with their own hands. In 2022, the company collaborated withnearby communities to carry out live cloud broadcast, allowing people
to make virtual visit of the Green Paper Culture Center through live
streaming. This new feature received widespread praise.

including inviting residents' representatives for mill visit, participatingbooks to kindergartens, communicating with voluntary environmental
protection supervisors, and jointly carrying out festival celebration

activities such as the Lantern Festival, the Dragon Boat Festival, andthe Mid-Autumn Festival, so as to maintain harmonious neighborhood
relations with local residents.

Environmental Protection Campaigns
In response to the theme of "Work Together to Create a Clean andBeautiful World" of World Environment Day, Hainan Jinhai Pulp &Paper and Hainan Gold Hongye organized a variety of parent-child
activities of "Environmental Protection Knowledge in Communities"
in surrounding communities to promote the concept of ecologicalcivilization, raise the awareness of community residents of World
Environment Day, and spread environmental protection knowledge.
The activities included garbage classification and identification,
environmental protection poster painting, environmental protection
knowledge quiz, etc. Employee volunteers also formed more than 10
beach cleaning teams and collected more than 20 bags of garbage,
including broken glass bottles, plastic bottles, broken fishingnets, foamed plastics, waste electrical wires, etc., contributing tomaintaining clean and beautiful beaches in local communities.

Charity and Philanthropy
In August 2022, the Ningbo Beilun District "Two Mountains"
Environmental Protection Public Welfare Foundation was established.
Ningbo Asia donated RMB1.5 million to the foundation to support its
activities and programs such as ecological environmental protection,
ecological civilization construction, promoting green development, as
well as environmental protection awareness raising and education.
Hainan Jinhai Pulp & Paper has long been a strong supporter of charityand philanthropy. In 2022, the company made several donations ofteaching and office equipment, books, and tissue to local schools to
support local education development. During the Spring Festival, its
employee volunteers visited surrounding communities and brought
gifts for to elderly residents, impoverished households, and children
in welfare institutions. The company also donated funds to support
the improvement of community cultural and sports facilities and theorganization of basketball, volleyball, and chess competitions for local
communities.
In August 2022, dozens of Gold East Paper employees participated ina voluntary blood donation, donating a total of 24,000 milliliters ofblood. Over the past decade, Gold East Paper employees had madevoluntary blood donations for nearly 1,600 person-times, with a
total blood donation of 479,330 milliliters. It has been awarded the"Advanced Unit for Promoting Voluntary Blood Donation in Zhenjiang
City" for consecutive years.

People could visit the Ningbo Asia's Green Paper
Culture Center virtually through live streaming

Ningbo Asia participated in special actions on community
grassroots governance

APP China volunteers cleaned up the trash on a local beach

Hainan Jinhai Pulp & Paper donated Love Stools to Yangpu
Experimental Primary School

Gold East Paper employees participated in blood donating

78

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Economic and Governance:
Building a Solid
Foundation for
Sustainable
Development
Digital and Intelligent Transformation

82

Risk Management

92

R&D and Innovation

Business Integrity and Ethics
Supply Chain Management

88
94
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APP China Sustainability/ESG Report 2022

Economic and Governance: Building a Solid Foundation for Sustainable Development

The Digital and Intelligent Transformation Strategy of APP China

Digital and Intelligent Transformation
Use digitalization to connect
upstream and downstream
business processes, andimprove efficiency by・ Automatic uploading andDigital andacquisition of information

Intelligent 1.0:

Efficiency Tools

・ Data-driven machine intelligent

designing a comprehensive

Our Commitment:

platform where data can be

We strive to promote comprehensive upgrading of production and operation efficiency by actively promoting digital anddigitized and visualized, andintelligent transformation, intensifying the analysis and application of big data, implementing data-driven decision-making,the computation results can be

management and innovation, and focusing on artificial intelligence applications and intelligent manufacturing.

promptly transmitted.

decision-making

Digital and・ Implementation of intelligent

Intelligent 2.0:

decisions with guidance from

Business Decision-

managers

makingOur Progress:
Our Digital and Intelligent 2.0 project has entered the stage of in-depth development
Our mills have completed the implementation of the lean management system, which has significantly improved theiroperational efficiency

Rudong Base continuously improved the capabilities of its logistics system, such as moving shipment into and out of its

automated warehouse and managing the inventory in storage. Its warehouse capacity has increased by 4.75 times and has

achieved the capability of one-stop loading

Planning Highlights of APP China's Intelligent Production Line01

Pulping

Using unmanned transporter cranes and conveying system to

02

Using automatic wire cutting and automatic wire detection

Using rail guided vehicles

replace forklift

equipment to effectively reduce the need for labor

Paper-making(RGV) to move basepaper directly to theworkshop

Using RGV to move basepaper and empty rolls
across workshops
In the context of Industry 4.0, digital andsteadily stepped into Digital and Intelligent

Headquarters departments will establish

an inevitable choice for traditional

achievements in the rolling out of digital

guidance for the implementation of various

intelligent transformation has become

enterprises. It is not only a megatrend ofsocial and economic development, butalso a crucial foundation that supports

2.0. In 2022, our mills had made greatand intelligent development and won
many national and local honors.

our technological innovation in the future.

Driven by business needs, ourof digital and intelligent management,

Intelligent 2.0 empowers our business

APP China actively explores the direction
and strives to integrate digital andintelligent transformation into its core

strategy. After years of implementation,

APP China has completed the construction
and optimization of the deployment of

Digital and Intelligent 1.0, including thecomprehensive coverage of enterprise

resource planning (ERP), manufacturingexecution system (MES), office automation(OA), and APP transportation management
system (ATMS). Now, we have already82

transformation towards Digital andprocesses, such as sales, production, quality
management, supply chain, logistics,

equipment maintenance, etc., with various

digital and intelligent measures to optimize
management and processes. We also

carried out data analysis to obtain insightto further improve the effectiveness of ourdevelopment strategy.

In order to implement the Digital andIntelligent 2.0 strategy, our BUs, mills andUsing Radio Frequency
Identification (RFID) to

dedicated working groups to provide

track the production andinventory information ofdigitalization projects within the Company.

Meanwhile, the Company will also organize

MBOS competitions on digital and intelligent
transformation to encourage the replicationof outstanding application scenarios among
our mills, so as to achieve more extensive
and in-depth application of artificial

intelligence, big data, the Internet of Things,
and intelligent automation technologies.

03

each roll of paper
Processing

Using fully automated04

equipment

Using fully automated loading and unloading vehicles andvisual detection

Establishing a Warehouse Management System

packing and boxing

Application of industrial
technology

Complete adoption of

Warehousing

equipment

Construction of fully automatic stereoscopic warehouseintelligent automatic

guided vehicles (AGV) for
product handling

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APP China Sustainability/ESG Report 2022

Economic and Governance: Building a Solid Foundation for Sustainable Development

Bohui Paper's Lean Management System Became Fully Operational
Bohui Paper is committed to building a green, low-carbon,

In 2022, Bohui Paper's digital and intelligent transformation

technological innovation and green and low-carbon circular

operational, and has already started showing the advantages ofdigitalized and intelligent mill. It adheres to the principles of

economy, and continuously implementes management reform
to promote the construction of digitalized and intelligent mill.

project, the Lean Management Project, became fully

digital, intelligent and standardized fine management.

Effects of Jiangsu Base of Bohui Paper's Intelligent Mill

Planning andscheduling

Realized fast production scheduling and timely response to demand changes.

Realized transparent and refined management of all production processes, and managers can realize timely
error prevention and advance management based on real-time production data, which significantly reduces
production costs and improves production efficiency.

Warehousing
anddistribution

Rudong Base Steadily Implemented Digitaland Intelligent Development
Based on the design concept of Industry 4.0, APP China
is committed to building Rudong Base into a world-class intelligent papermaking base that is safe, efficient,
low-cost, and environmentally friendly. The project wasplanned to be constructed in three phases, with a total

Automatic paper reeling balers

there were seven production lines of Phase 1 of the projectcompleted, with production capacity totaling 780,000
tons.

Rudong Base was designed to achieve an intelligent andmodular production mode from raw materials to shipment

Implemented the Warehouse Management System, and adopted intelligent warehouse equipment, suchas automatic paper reeling balers and automatic warehouses, to realize automatic management of the raw
materials and products out of and entering the warehouse, effectively optimize the warehouse management
process, and promote the efficient use of warehouse resources.

Improved the timeliness of production process quality control and product control capabilities by monitoring,predicting and managing product quality along the whole production process.
Carried out blind sample testing for the inspection of incoming raw materials to avoid the risk of losses due tobiased inspection results.

Qualitycontrol

Avoided the risk of missed inspection and the risk of unqualified raw materials entering the production process.

planned area of 8,500 mu and planned annual production

capacity of 3.96 million tons of high-grade tissue. In 2022,

Production
andoperations

Energy,environmental
protection
and safety
management

Achieved energy conservation and consumption reduction through timely adjustment of production processes
and workflows in accordance with the online monitoring results of energy consumption, water consumption,and other resource consumption.
Achieved effective environmental management and control with the automatic monitoring of wastewater
discharges, online monitoring of wastewater volume, and the lifecycle monitoring of hazardous waste.

Realized gridded and digitalized safety control by automatically controlling and recording the conditions ofmajor hazards and adding intelligent safety facilities.

(including port, pulp warehouse, papermaking workshop,
processing workshop, and automated warehouse).

Regarding its general layout, Rudong Base adopted

diversion designs and used a one-directional loop designfor the main route, to improve its overall traffic efficiency.

As of the end of 2022, Rudong Base had fully implemented
its lean management system, achieved full coverage of

5G network, and adopted a series of digital and intelligent
initiatives, such as automatic pulp feeding, intelligent

handling, traceability tracking, automated assembly lines,
intelligent handling robots, and intelligent logistics.

84

Guangxi Jingui Pulp & Paper Improved R&D Efficiency with Digital and Intelligent System
Guangxi Jingui Pulp & Paper's R&D Department used an automated system to replace repetitive labor by connecting front-end

business, product, R&D, and operation with a series of software systems such as production manufacturing execution system (MES),
production big data generation, big data analysis, and equipment dynamic management system, etc. By using these systems, R&D

personnel were able to not only retrieve and analyze data and information, such as product quality, chemical use, equipment operation
status, etc., at any time, but also use the trend analysis function of the systems to predict possible problems customers might comeacross when they use the product, and make timely adjustment to the production process to optimize product quality. As the digitaland intelligent systems were used with increasing proficiency, the company's R&D cycle has been effectively shortened.

85

APP China Sustainability/ESG Report 2022

Economic and Governance: Building a Solid Foundation for Sustainable Development

Gold East Paper Implemented the Warehouse Management System

Developing Smart Forestry

Gold East Paper achieved positive results with digitalized management of its warehousing operations, including warehousing

APP China Forestry continuously improves afforestation

afforestation, nurturing, management, and logging, effectively

developed APP Transportation Management System (ATMS).

mechanized tools. In 2022, full mechanical cutting accountedof forestry. By using digital technologies such as logging area

operation, shipment operation, shipment risk control, the Extended Warehouse Management (EWM) system and the independently

and logging efficiency with the increased application offor 16% of all cutting operations, up 6% compared with

2020; mechanical afforestation accounted for 61% of all
Warehousing Operation

Shipping Operation

improving the digital and intelligent operational capabilities

monitoring, yard monitoring equipment, GPS monitoring andtransmission technology, the Company was able to realize

afforestation operations, up 21% compared with 2020.

visualized forest management, reduce the risk of timber loss,

Meanwhile, drones had been used in the whole cycle ofand ensure timber safety.

forestry operations, including land acquisition, planning,

APP China's Application of Drone Technology in Forest Management
Outlining and calculating

Afforestation planning andForest land survey andForest track measurement

the area
Increase warehousing efficiency by 25% through automatedImprove order picking efficiency, shipping order printing

by effectively eliminating unreasonable reworking.

10% respectively through reducing manual operations andand refined management; and significantly reduce reworking

efficiency, and the packing efficiency by 87%, 25%, andstreamlining work processes.

assessment

Land
Acquisition

management

Planning

Afforestation area survey

Afforestation supervision

Afforestation

Full Forestation Period

Shipping Risk Control

Interactive Access Management with EWM and ATMS

Logging

Management

Measuring the area of"Three Preventions*" patrol

Logging supervision

Evidence collection forclearings in forest land

Nurturing supervision

Post-nurturing management

abnormalities* "Three Preventions" refers to prevention of fire, prevention of illegal logging, and prevention of land occupation.

Automatically check the data consistency of each link in the

Vehicles with appointments can get access by using theat four control points during the shipment operation,

check-in status.

In November 2022, APP China launched the Forestry Lean

information release document is transmitted to ATMS in real-a Smart Forestry Management Platform. The project was

shipment process, and conduct credit checks on customers
including creating order picking lists, printing shippingorders, transmitting release orders, and system posting. As aresult, the accuracy rate of matching the shipment quantitywith the sales delivery order has reached 100%.

appointment number to query its vehicle information andManagement Project and conducted research in APP China

After the shipment loading review is finished, the shipment

Forestry Guangxi BU in preparation of the construction oftime.

designed to cover the requirements of the entire forestry

operation, such as land acquisition, small shift operation design,

An empty vehicle is weighed when it enters the mill, andGIS cartography, logging-afforestation-nurturing operations,then gets weighed for the second time after the shipment

seedlings cultivation, asset management, quality control,

has been completed. If any abnormality is detected, theresource survey, and accounting and finance, etc.

vehicle will be weighed again for verification. If the problem
persists, personnel from product, security, and quality

assurance departments will be involved in the inspection to
fully prevent operational violations.

86of forest land

NurturingForest land patrol with drones

87APP China Sustainability/ESG Report 2022

Economic and Governance: Building a Solid Foundation for Sustainable Development

R&D and Innovation

Our Commitment:
APP China constantly optimizes our R&D mechanisms, improves development capabilities regarding core technologies, andcontinuously explores the development of green and environmentally friendly products, aiming to use our paper products tobetter serve people's pursuit for a better life.

Bohui Paper Passed the "Zibo Engineering

Hainan Jinhai Pulp & Paper Was Recognized

Research Center for New Materials for

as a "Provincial Enterprise Technology

Papermaking"Center"In September 2022, Bohui Paper successfully

After a comprehensive evaluation of Hainan

Center for New Materials for Papermaking"innovation investment, innovation talent,passed the "Zibo Engineering Research

Jinhai Pulp & Paper's performance incertification. The research center was atechnology accumulation, innovation platform,

joint program between Bohui Paper andtechnology output, and innovation outcomes,

Tianjin University of Science & Technology,

Our Progress:

the company was officially recognized as aaiming to promote the close integration

2022 R&D investment RMB3.138 billion, up 28.83% year-on-year"Provincial Enterprise Technology Center"of technology R&D and production, andjointly recognized by Hainan Provincial

support the company's development in terms

1,097 patents granted cumulatively

Development and Reform Commission inof technology strategies and technology

December 2022.

management.

Intellectual Property Management
R&D Mechanism Construction
R&D and innovation are important ways

cultivation, and new product development.

patents, 17 assigned invention patents,

competitiveness. We are committed towithin the reporting scope totaled RMB3.138

patents. In addition, we also had 139 patents

for enterprises to enhance their corecontinuously strengthening our R&D andinnovation capabilities through process

improvement, project construction, talent

In 2022, the R&D investment of all units
billion. As of the end of 2022, the total

cumulative number of validly authorized

442 utility model patents, and 139 designin the process of application.

patents was 1,097, including 499 invention

APP China strictly abides by applicableIntellectual Property Rights Management

capabilities of the Company. Thesethe Patent Law of the People's Republic of

Operation Procedures , etc. Our intellectual

employees in terms of intellectual property

Republic of China , the Copyright Law of the

copyrights, trademark rights, and tradelaws, regulations and provisions, such as

China , the Trademark Law of the People's

People's Republic of China , the Registrationof Computer Software Copyright Procedures ,etc. and has formulated and continuously
optimizes relevant policies such as the

APP China's R&D Focuses

Measures and the Patent Management

property-related policies cover patent rights,
secrets, etc., aiming to protect the legitimate
rights and interests of all units of APP China,
encourage employees to invent, innovate

policies regulate the code of conduct forrights, ensuring the protection of both ourown intellectual property rights and theintellectual property rights that belong toothers.

and create, and enhance the innovation

Process Improvement

Project Construction

Talent Cultivation

New Product Development

Product Innovation

Utilizing the MBOS
management platform
to urge our mills to
cut costs and improve
efficiency, such as energy
recovery and reuse,technological upgrading
and transformation, etc.

Vigorously adopting new digitaland intelligent technologies,
accelerating the digital andintelligent transformation of ourmills, and carrying out digitaland intelligent transformation
planning for new expansion
projects.

Strengthening the cultivationof diversified technicalpersonnel and building ahigh-quality team with strong
comprehensive capabilities
as well as hands-on problemsolving experience.

Product designing withpriorities given to productattributes such as low carbon,
environmentally friendliness,and biodegradability.

APP China maintains an unwavering commitment to providing customers and consumers with high-quality products. As the concept of sustainable88

Following the trend of low-carbon
and environmentally friendliness,
we vigorously promote theapplication of new energysaving and emission-reduction
technologies, and strive to makeall mills recognized as a Green
Factory.

Strengthening incentives andrewards for R&D talents topromote the enhancementof independent innovation
capabilities.

Developing new materials to
replace specific chemicals,
improving processes, andreducing chemical usage.

Intensifying new productdevelopment and enhancing
product functionalities.

development increasingly penetrates into various aspects of economic and social development, we are also intensifying our efforts to exploreand develop products that are more environmentally friendly, healthy, and safe, and provide customers and consumers with satisfactory user
experience.

Gold East Paper Reduced Fluorescent Brightener Use in Copy Paper Product
When producing high-brightness paper, not only a large amountdosage of fluorescent brightener, and effectively reduced thealso a high-sulfonic acid brightener needs to be used in surface

process by adopting innovative papermaking processes andof fluorescent brightener needs to be added to the pulp, but

sizing and coating. In order to minimize the use of fluorescentbrightener, Gold East Paper analyzed and researched theamount of fluorescent brightener added during the production
adjusting the raw material mix, further reducing the negative
impact on the environment.

89

APP China Sustainability/ESG Report 2022

Economic and Governance: Building a Solid Foundation for Sustainable Development

Guangxi Jingui Pulp & Paper Developed Low-odor, Ultra-high Bulk Coated Refrigeration
White Cardboard Product
Plastic packaging still plays a significant role in the current

products. In this regard, the company investigated the

Jingui Pulp & Paper developed an ultra-high bulk coatedfood-grade chemicals added in the production process, andcold chain logistics industry. Regarding this need, Guangxi

refrigeration white cardboard product, which helps the cold
chain logistics industry reduce the use of plastic packaging.
After the product was launched, it received widespreadrecognition from customers.

In addition, customers were asking for increasingly

possible sources of the odor, such as raw materials used orconcluded that there was a relatively high correlation withthe cleanliness of chemi-mechanical pulp. The company

VIRJOY Gentle Bio Wipes Products
In 2022, Gold Hongye Paper developed and launched the

VIRJOY Gentle Bio wipes products, including pure water wipes,
toilet wipes, and kitchen wipes. This product was developed
by applying the composite Staphylococcus aureus enzyme
technology in wipes products.

quickly formulated and implemented an improvement planThis internationally pioneering and domestically exclusive

volume while meeting customer needs.

class patents, is the result of 30 years of research by the Instituteand got rid of the odor, achieving a steady increase in order

stringent requirements for the odor aspect of suchbiocatalytic antibacterial technology, which has multiple worldof Biological Science of Fudan University. This biologicalenzyme can directly crack the peptide chain of the bacterial cellwall peptidoglycan, which destroys the integrity of bacterial cellwall to achieve the intended sterilization effect. This mechanism

VIRJOY Gentle Bio wipes

is also less prone to create drug resistant bacteria. Because

biological enzyme itself is a protein, it will degrade into aminoacids and water afterwards with no accumulation and residue

VIRJOY Food Care Wipes
In order to actively respond to the increasingly refined needs

food-grade ingredients. It has passed third-party professional

successfully developed and launched the VIRJOY Food Careto clean food, tableware, and hands, making it a convenientof consumers for healthy living, Gold Hongye Paper had

wipes product. This product only contains EDI pure water andtesting, including an acute oral toxicity test. It can be safely usedin human body, making the product safe and environmentallyfriendly.

item for everyday travel.

Bohui Paper's Unbleached Single-sided Coated White Ivory Cardboard Passed Green Footprint Evaluation
The unbleached single-sided coated white ivory cardboard product of Jiangsu Base of Bohui Paper had passed the "Green Footprint

Evaluation" of China Quality Certification Center. The certification was carried out in accordance with the evaluation indicators in theTechnical Specification for Green-design Product Assessment-Packaging Paper and Cardboard issued by China National Light Industry
Council. As a green product, this product has the following characteristics:

It reduces the consumption of

Pulp consumption per unit of thisthe bleaching work in the pulping

regular white cardboard, reducing theconiferous wood and pollution fromprocess by using unbleached chemi-mechanical pulp and low-brightness

product is 15% lower than that ofconsumption of wood pulp fibers.

broadleaf pulp.

There is no fluorescent brightener in

There is no sizing in the pulp. The

the coating process, which 100% stays

to control its water absorption rate,

the pulp. Brightener is only used inon the surface of the paper and does
not enter the water system.
VIRJOY Food Care wipes

90

product uses surface sizing technology
which improves the cleanliness of thewhite water generated and reduces

the difficulty of wastewater treatment.

91

APP China Sustainability/ESG Report 2022

Economic and Governance: Building a Solid Foundation for Sustainable Development

APP China's Three Lines of Defense for Internal Control

Risk Management
First line of defense

APP China is committed to continuously optimizing our risk management and internal control system, and inspecting andevaluating the effectiveness of its corporate governance, risk management, and internal control. The Company also ensures
stable and sustainable operations by intensifying the application of digital technology and enhancing risk management
capabilities and efficiency.

The business or project

The Internal Audit Department and the Corporate

in accordance with thecontrol policies andmake up the third line of defense. The Internal Audit

internal audit manual and
SOPs, which is inspected
and approved by thesupervisors.

leaders formulate relevant
procedures and conduct
self-examinations andevaluations on theimplementation of thefirst line of defense.

Completed the digitalization audits of 23 scenarios to effectively ensure the compliance and advancement of the digital andintelligent projects

Continuously improve information security governance, to build a solid foundation for the Company's sustainable operationsin the context of digital and intelligent development

has passed the national information security

security issues to relevant IT departments.

of deficiencies in process control andmanagement system to effectively prevent

control points in existing processes by using

relevant rectification suggestions andaudited the enterprise risk management

big data technology, and used its big data

platform to continuously monitor the risks
identified, so as to form a long-term risk
management mechanism.

implementation of value-added efficiency

The Company also conducted targetedbased on audit findings, with 15 procedural

processes regarding its digital and intelligent

audits of its entire procurement and sales
projects. The audits identified a number

compliance management, and proposed
tracked the rectification process. In 2022, theCompany had completed the digitalization
audits for 23 scenarios, including sales-

related scenarios, logistics scenarios, raw

platform. In 2022, our e-commerce system
protection level III certification.

regulations and policies on information

In 2022, we focused our information security

on our OA system and can be accessed byprevention, and information security

policy for the e-commerce applet of theprocess. Meanwhile, the Company also

documents drafted or revised during the

responsibilities for the integrity reporting hotline,

management system consistent with the

The Company has also formulated a privacy

APP China has established the "Three

improvement and rectification activities

matters related to integrity and compliance, assuming

also set up a dedicated email address for

ISO27001 Information Security Management

Risk Management Systemand other business units, and ensured theexclusively dedicated to independently investigatingcompliance and security of the e-commerce

infrastructure and information security

our employees at any time.

Group's forestry, pulp, paper, chemical

The Corporate Risk and Integrity Department is

APP China has built a company-wide IT

security and cybersecurity, which are posted

and carried out 26 internal audits for theto risk-based audit plans and special requirements.

Information Security Risk Management

System, and formulated a series ofCompany focused on risk prevention

Department conducts independent audits according

business partner due diligence, among other matters.

Completed 26 internal audits

and control business risks. In 2022, theRisk and Integrity Department at the headquarters

compliance investigations, integrity training, and

Our Progress:

Lines of Defense for Internal Control"

Third line of defense

Frontline employees

implement risk control

Our Commitment:

Second line of defense

efforts on infrastructure, data leakageof e-commerce platforms to ensure thematerial procurement, weighing, andentering-warehousing scenarios, andinformation security.

advisory services for new technologies

every month through online enterprisenational information security protection

and 14 new employee training sessions on

throughout the year.

platform, and regularly commissioned
for the compliance certification forthree in-person executive training sessions

In the future, the Company will strengthen

privacy leaks or cybersecurity incidents
The Company conducts information

external consultancies to help us apply

In 2022, the Company conducted a total ofgovernance. There was no incident of

Tissue Business Unit (TBU), conducted

special audits for TBU and its e-commerce

employees to report suspicious information

security training activities for all employees
WeChat postings, WeChat mini-game push,posters, and phishing email testing, inorder to enhance employees' awarenessinformation security risk assessment andthat may be used in the process of digitaland intelligent transformation, further
enhancing our information security

governance capabilities and fully ensuring
the information security of the newly built
infrastructure.

of information security. The Company has

Information Security
Management
Focuses of APP China

finished product shipment scenarios, tocomprehensively prevent operational risks
in digital and intelligent projects.

Infrastructure

・ Terminal antivirus management

2022

・ System vulnerability patch management
The Company focused on risk prevention and carried out
and other business units

26 internal audits for the Group's forestry, pulp, paper, chemical

・ Network isolation

・ Server host security reinforcement

・ Process management of major security
incidents

Information Security Governance
Data Leakage Prevention
・ Terminal file leakage

prevention management

・ Privacy protection

92

・ Revision of information security
policies・ Employee information security
awareness training

93

APP China Sustainability/ESG Report 2022

Business Integrity and Ethics

Economic and Governance: Building a Solid Foundation for Sustainable Development

Integrity and Compliance Management
APP China is committed to the set ofmanagement system. Guided by the APP

department for the Company's integrityof "Integrity and Commitment",

we apply the concept of compliance to allcollaborates with other departments to

moral values built on the cornerstones

China Integrity Management Framework,and has formulated the APP Chinalevels of employees, and actively involve

Integrity Management Framework in
Our Commitment:
APP China is committed to business integrity. The Company continuously implements anti-corruption and anti-fraud systems
and campaigns, optimizes its disciplinary and prevention systems for business fraud, and makes unremitting efforts to build
a good business integrity ecology.

all employees as well as suppliers toaccordance with the ISO37001 anti-

participate in integrity and compliancebribery management system, ensuring

management and practices. We havethe sustainable development of theestablished the Corporate Risk andCompany with a top-down integrity

Integrity Department as the responsible

and compliance management. It

plan, supervise, and implement specificintegrity and compliance initiatives,
forming a well-defined compliancemanagement mechanism with clear
accountabilities.

Our Progress:
Hosted 29 training sessions related to integrity, and 100% of our employees had received trainings on business ethics
compliance and integrity culture

APP China Integrity Management Framework

Launched "Sunshine Integrity Month" activities for five consecutive years, cultivating a strong integrity culture
Percentage of suppliers to whom our anti-corruption policies had been communicated: 100%

Resolutions and commitments by top management

Committee for Moral Disciplines and functional compliance department

Bribery and Embezzlement and Integrity Risk Evaluation and Monitoring

Response

Personnel

Employee Code of
EthicsActive, good-will
whistleblowing;keeping whistleblowers
confidential and protected

Event management

Procedures

Relevant policies,
standards, andcontrol procedures

Due diligence; sunshine
declaration

Investigation and casemanagement

Data

Personnel selection andappointment,
supervision,and motivation

Self-examination,compliance review
and audit

Stop-loss measures

Systems

Education and training,and culture building

Data analysis

Corrective actions

integrity culture practices

Discovery

Becoming a world-class benchmark for corporate

Prevention

Internal and external communication; reporting and feedback

Keeping everyone involved. Shouldering responsibilities

94

95

APP China Sustainability/ESG Report 2022
The Company has put forward clear
requirements for employees' integrity andcompliance behavior in the Employee
Handbook and has formulated a numberof integrity and compliance management
policies, such as the APP China Employee
Code of Ethics and Integrity and theProvisions for Prohibition of Gifts andHospitality . Over the years, the Company has
actively implemented the Whistleblowing
Operation Management Measures and otherreward policies to encourage employees,
business partners, and other stakeholders
to report illegal activities and violations
within the Company. The Corporate Risk
and Integrity Department and the Internal
Audit Department will follow up on thewhistleblowing information to ensurethat it is appropriately handled while
strictly ensuring the confidentiality of the

Economic and Governance: Building a Solid Foundation for Sustainable Development
whistleblower's identity information. We
maintain a "zero-tolerance" stance on
any behavior that violates professional
ethics and principles of integrity, and arecommitted to handle all illegal or noncompliant behaviors by internal personnel
strictly and impartially.
In order to address potential fraud risks,
we have established a "Three-line of
Defense" system consisting of relevant
BUs/ operational departments, internal
control functional departments, and the
Audit Department, and the Corporate
Risk and Integrity Department, to achievea standardized anti-fraud mechanism.
APP China implements and constantly
communicates the Encouraging Reports ofFraud Within the Group and the Reward Plan
to the employees, suppliers, and business

partners. We do so to demonstrate our zerotolerance stance on fraudulent behavior
and support for the reporting of violationsin the workplace. As the main responsibility
department, the Corporate Risk and Integrity
Department has a dedicated anti-fraud
investigation team, which is responsible forhandling received clues and whistleblowing
complaints, and is authorized to conduct
investigations independently without
interference.
Regarding supplier integrity and compliancemanagement, APP China formulated the Sinar
Mas Supplier/Partner Pledge on Business
Compliance and Integrity , which stipulates
the code of conduct for supplier's integrity
operation and is accessible in our online
supplier management system. All suppliers
are required to download and sign it.

APP China Integrity and Compliance Whistleblowing Channels

Email:

Building a Culture of Integrity
APP China continuously promotes theincluding training, lectures, thematicother relevant policies, aiming to enhance

regularly conducts various training andposters, in the advocacy of ethical standards

compliance and ensure that they practiceconstruction of a culture of integrity, andcultural activities to promote integrity andcompliance. In 2022, we continued to engage
all employees with a variety of activities,

learning, online quizzes, brochures, andas set out in the APP China Employee Codeof Ethics , the Integrity and the Provisions

employees' awareness of integrity andintegrity and compliance in their daily work.

for Prohibition of Gifts and Hospitality , andSunshine Integrity Month in the Digital Age
In October 2022, APP China organized its annual "Sunshine
Integrity Month" event with the theme of "Digital age - Integrity
with Digitalization". A series of activities were organized
during this four-week period, including the companywide Integrity Pledge, reporting of conflicts of interest, andintegrity examinations, etc. We invited an external expert on
digitalization to give a thematic lecture on "Data GovernanceEmpowering Digital Trust". By interpreting the importanceof digital trust in data governance and speaking on how to
support our digitalization with integrity and compliance,
the lecture played an active role in supporting the healthy

development of our digital and intelligent transformation byhelping enhance employees' understanding of digital andintelligent transformation from the perspective of integrity
and compliance, aiming to promote the healthy development
of digital and intelligent transformation. In addition, we alsoorganized integrity-themed training for managers, analyzing
the causes behind fraudulent behaviors and emphasizing theimportance of integrity and the Company's values of integrity
and self-discipline to employees through short videos, casestudies, and other forms.

Phone:

GRW@app.com.cn

021-22839763

APP China senior management took theIntegrity Pledge

APP China Whistleblowing Mechanism

Scope of Whistleblowing
・ Business related illegal activities or・ Violation of company policy

・ Violations of the Employee Codes of・ Intentionally damage the・ Theft/encroachment/

・ Workplace violence

violations

Conduct of the Company

misappropriation of corporate assets

or integrity principles

reputation of the Company

・ Major crisis

・ Abuse of power・ Corruption/bribery (accepting/giving bribery)・ Leakage of major business secrets
or information security incidents

・ Conflict of Interest (external and2022 "Sunshine Integrity Month" event

internal)

Employees partcipated in integrity advocacy
lectures

Integrity Monthly Introduced Whistleblowing Channels
Principles of Whistleblowing

Reward for Whistleblowers

・ In good faith and with honesty

・ Internal whistleblowers: Bonuses,

・ Real-name whistleblowing is preferred, while

・ External whistleblowers: Bonuses,

・ Strict confidentiality

anonymous whistleblowing is acceptable96

rewards and credits
Channel rewards

APP China launched the monthly internal publication, theIntegrity Monthly , with the goal of continuously promoting
and maintaining the integrity culture and business ethicsof the Company, and jointly building a transparent andharmonious development environment for the Company.

The Company publicized the whistleblowing channels in thecorruption, illegal or immoral behavior they came across, so

as to help the Company identify problems in terms of integrityand ethics. Meanwhile, the Integrity Monthly also shared typicalcases to help employees better understand the importance ofwhistleblowing for the Company's healthy development.

monthly publication, and encouraged employees to report any

97

APP China Sustainability/ESG Report 2022

Economic and Governance: Building a Solid Foundation for Sustainable Development

Supply Chain Management
APP China's Requirements for Pulp and Wood Fiber Suppliers・ Suppliers are required to maintain valid records to demonstrate the origin of the source of raw materials (e.g., plantation), and to beable to demonstrate in general how the suppliers of wood fiber obtained their raw materials.

Our Commitment:
APP China strives to build a transparent and fair supply chain ecosystem by continuously optimizing a supplier management
mechanism, strictly managing supplier approval, and applying digital and intelligent technology to supplier management

processes. We also actively promote responsible procurement and are committed to continuously increase the proportion ofsustainable raw material procurement.

・ Suppliers and their upstream suppliers must comply with the laws and regulations of the countries in which they operate, includinglaws and regulations on environmental protection.

・ Suppliers shall guarantee that all wood chips come from plantation forests.

・ Suppliers shall take proactive actions to improve their own sustainability management mechanisms, including strengthening the
procurement of raw materials from plantation forests.

・ Suppliers shall comply with the Responsible Fiber Procurement & Processing Policy (RFPPP) of APP China's pulp and paper

Our Progress:
Required a mandatory due diligence process for all suppliers to ensure effective assessment and management of supplierbusinesses, guaranteeing to provide:

only timber that has been properly inspected and certified as legally sourced and traced through the chain of custody;risks

no timber harvested in violation of tradition and civil rights;

protection of HCV through appropriate forest management activities in source forests of timber where HCV forests are

Proportion of wood chips with forest certification in total wood chips procurement: 18.88%

identified;

Proportion of wood pulp with forest certification in total wood pulp procurement: 20.55%

only waste and wood residues that comply with national regulations and are not on the list of regulated species of theInternational Union for Conservation of Nature (IUCN) and the Convention on International Trade in Endangered Species ofWild Fauna and Flora (CITES) Appendix I;

no genetically modified trees for reforestation unless it is assessed as in compliance with best-practice standards; andtimber harvested in compliance with the Fundamental Conventions of the International Labour Organization (ILO).

The main supplier categories of APP Chinaof the online lean management systemand evaluates supplier performance withservices, equipment manufacturing,

improved the efficiency and accuracy ofintelligence, macro trends, historical data

include raw materials, energy, technicallogistics, and engineering and construction.
We continuously optimize the supplier due
diligence mechanism. With the support

launched during the year, we have further
supplier risk assessment. Meanwhile, wehave established a supplier performance

application modules such as market

In 2022, we focused on increasing the procurement of wood pulp with forest certification. We procured a total of 1,547,188.90 tons of certified

verification, and online analysis models, etc.

respectively.

wood pulp and 2,625,433.95 tons of certified wood chips, accounting for 20.55% and 18.88% of total wood pulp and wood chips procurements

evaluation data cockpit, which reviews

Proportion of Wood Chips Sourced from Certified Forests（%）
Supplier Approval・ Supplier risk assessment comprehensively considers thefinancial status, credit profile, fraud record, legal risk,

information security, and customer complaint system,

etc. of suppliers. Specific vendors such as wood chips andenergy suppliers are required to provide proof of third-party

certification regarding their health, safety, and environmental
protection performance. Suppliers are categorized as low-,
medium-, and high-risk.

・ Suppliers are required to sign the Sinar Mas Supplier/Partner

Pledge on Business Compliance and Integrity and the

Corporate Social Responsibility Statement and Pledge , aswell as abide by the integrity and compliance management
standards of APP China in their business conducts.

98

Proportion of Wood Pulp Sourced from Certified Forests（%）

Supplier Communication and Evaluation
26.95

・ Suppliers are subject to ongoing risk monitoring, and due
diligence assessments are reviewed at random intervals.

・ An effective supplier communication mechanism shall be

set up to quickly resolve various issues during cooperation toensure consistent supply of quality products and services.

17.45

21.13

19.41

24.20
19.80

18.88

17.96

14.23

・ Suppliers are classified based on their respective category

20.55

and evaluation results, and those who fail to meet ourrequirements for a long time will be removed from our
supplier list.

2018

2019

2020

2021

2022

2018

2019

2020

2021

2022

99

APP China Sustainability/ESG Report 2022

Performance in Numbers

Performance in Numbers
Annual average discharge concentration（mg/L）

Environmental Performance

Mill*Gold East Paper

Indicator

Unit

2022

2021

2020

Coal

ton

3,533,945.33

3,622,348.26

4,692,593.29

Dieselton

3,732.87

3,522.56

4,721.00

Natural gas

10,000 cubic meters

23,070.74

22,797.08

186,805.47

Kerosene

ton

0.66

0.65

0.44

Gasoline
Fuel oil
LPG

ton

ton

ton

Purchased electricity

10,000 kWhBlack liquor from pulp

ton

Solar power generation

10,000 kWh

Purchased steam

Other biomass fuels

Purchased green electricity*Not including the data of Rudong Base.

529.62

1,651.06
8,976.29

427,144.95

408.27

1,146.27
7,179.45

376,627.71

382.150.00

3,072.64

111,190.99

GJ

15,460,124.74

12,106,028.74

1,502,787.00

ton

537,774.95

387,104.53

331,960.35

10,000 kWh

2,978,895.18

3,102.42

21,122.00

2,796,688.29

2,440.66
02,760,861.37

2,514.60

0NH3-N

Total Phosphorous (TS)Total Nitrogen(TN)Suspended Solids

46.94

1.02

0.19

3.59

7.67

0.14

2.55

15

Hainan Jinhai Pulp & Paper

59.39

0.775

0.026

Guangxi Jingui Pulp & Paper

48.88

0.84

0.068

Ningbo Asia

Energy*COD

Shandong Base of Bohui Paper
Jiangsu Base of Bohui Paper

46.85
26.5

32.88

0.94

0.435

3.69

0.0401

1.85

3.31

4.8

5.42

-

3.72

0.03

16.5

-

* Wastewater discharged from Hainan Gold Hongye and Hainan Gold Shengpu was treated by Hainan Jinhai Pulp & Paper. The annual average
pollutant discharge concentration data for each mill were below the requirements of the Discharge Standard of Water Pollutants for Pulp and Paper
Industry (GB 3544-2008).

Water reuse
Amount of reused water (ton)
Mill
2022

2021

2020

Gold East Paper

650,109,600

658,752,000

594,104,400

Ningbo Asia

245,318,915

230,884,979

Hainan Jinhai Pulp & Paper

974,001,791

Guangxi Jingui Pulp & Paper

430,151,971

Hainan Gold Hongye

66,501,000

62,574,421

Hainan Gold Shengpu

985,949,728

1,022,668,368

340,441,483

311,807,317

68,373,110

60,042,237

234,576,459

69,750,625

59,399,375

Water resources and wastewater*
Indicator

Unit

2022

2021

2020

Total water withdrawal**

ton

140,426,381.96

125,567,722.20

120,215,643

Total wastewater discharge***

Wastewater discharge per ton of paper produced
Wastewater discharge per ton of pulp produced
COD emissions per ton of paper produced

COD emissions per ton of pulp produced

ton

ton

ton
kg

kg

109,903,311.37

5.79

101,907,671.22

5.88

89,726,593

Indicator

Unit

2022

2021

2020

6.20

Total SO2 emissions

ton

688.82550.15404.500.22

Total soot emissions

ton

9.60

12.46

12.50

0.60

0.86

0.85

0.24

0.24

*Not including data from APP China Headquarters and Rudong Base. Not including data from APP China Forestry except for the indicator of total
water withdrawal.
*98.54% came from surface water, 1.45% from third-party facilities, and 0.01% from ground water.
***In 2022, there were zero incidents of major water body pollution at APP China.

100

Air pollutant emissions*

Total NOx emissions

Total VOCs emissions*Not including the data of APP China Forestry and Rudong Base.

ton

4,243.02

3,995.42

4,145.61

ton

0.04

0.14

-

342.10292.95305.06101

APP China Sustainability/ESG Report 2022

Performance in Numbers

Exhaust gas emissions (ton)
Mill
SO2

NOx

Soot

Volatile Organic Compounds (VOCs)Gold East Paper

99.82

267.1

15.38

0

Ningbo Asia

201.55662.09

16.62

0

5.644

0.036

Hainan Jinhai Pulp & Paper*
Guangxi Jingui Pulp & Paper

Bohui Paper

182

205.35
0.103

2,586

703.4524.38

197

Social performance0

107.460*The data of Hainan Jinhai Pulp & Paper include those of Hainan Gold Hongye and Hainan Gold Shengpu.

Employment*
Indicator

Unit

2022

2021

2020

Employees directly and indirectly employedperson21,361

19,42819,027

person15,90014,184

12,926

Employees directly employed

Male employees directly employed

20,568

Employees from Mainland China

person20,44018,352
40

-

1,572

Employees from Hong Kong, Macao and Taiwan

person

1,039
92

4,302
927
94

Indicator

Unit

2022

2021

2020

Non-hazardous waste generated

ton

2,199,475.04

1,933,954.95

1,772,130.11

Employees from abroad

person36

ton

353,504.67

378,796.61

717,315.56

Employees indirectly employedperson

793

942

142

172

Non-hazardous waste disposed of
Recycling and reuse

ton

2,202,827.72

2,017,693.61

1,914,695.06

Onsiteton

106,417.74

109,014.00

Incineration

ton

856,288.15

779,631.70

485,644.50

7,175.90-

OffsiteWith energy recovery

Without energy recovery

Selling to external parties for reuse

Centralized treatment by local sanitation departments

Hazardous waste generated

Hazardous waste disposed of*Not including the data of APP China Forestry and Rudong Base.

ton

247,086.94

269,782.61

-

-

ton

848,707.19

772,455.80

ton986,722.60

851,379.42

705,781.84

ton

1,203.76

2,096.41

759.77

ton

ton

ton

7,580.96

5,986.41

1,242.56

6,570.00

2,098.16-

5,293.00

844.36

17,455personperson

4,668

18,486

Female employees directly employed

Employees with ethnic minority background

Waste*

personEmployees with disabilities

Male employees indirectly employed

Female employees indirectly employed

New employees

New male employees

New female employees

Employee turnover

person73

person651

personperson

-

-

5,763

4,848

1,507

1,142

1,106

4,621

person

470

3,742

1,165

3,577

2,514

1,962

564

320

366

person2,246

Male employees who were involuntarily terminated**

person492

person65

person-1,102

Male employees who voluntarily resigned

Female employees who voluntarily resigned-

770

personperson

69

4,529

433

911
479

Female employees who were involuntarily terminated**

personFemale employees who retired

person111

Indicator

Unit

2022

2021

2020

Employee turnover rate

%

14.81

11.97

10.10

Female employee turnover rate

%

14.22

10.52

11.04

%

9.32

8.34

-

Male employees who retired

99

1,545

342

92

151

94

45

30

*Employee-related data is calculated from statistical data within the scope of the report.
**The reasons for involuntary termination mainly include firing, non-renewal, negotiated termination, transfer to a sister mill, and death.

10

Environmental investment
Indicator
Environmental investment

Unit
RMB10,000

2022

2021

2020

101,174.12

103,069.13

73,084.31

Employee turnover rate

Male employee turnover rate

Environmental complianceIndicator
Environmental fines

102

Turnover rate of employees aged 30 and below
Unit
RMB10,000

2022

2021

2020

0

0

0

Turnover rate of employees aged between 31 and 50
Turnover rate of employees aged 51 and above

%
%
%

14.99

29.23
11.28

12.40
21.07
16.56

9.77
-

103

APP China Sustainability/ESG Report 2022

Performance in Numbers

Employee retention after maternity/paternity leave
Indicator

Unit

2022

2021

2020

Female employees who took maternity leaveperson

155

124

239

6

20

Female employees who returned to work after maternity leaveperson141

114

Male employees who took paternity leaveperson

400

338

437

5

5

Female employees who resigned after maternity leave

Male employees who returned to work after paternity leave

Male employees who resigned after paternity leaveperson12

person383

person

212

323

14

418

Unit

2022

2021

2020

Percentage of senior-level managers

%

0.95

0.99

1

Percentage of line-level employees

%

%

9.70

8.80

89.35

11

90.21

88

Indicator

Unit

2022

2021

2020

Percentage of female employees

%

22.70

23.27

25.95

%

18.80

18.62

27.29

person

412

337

571

Indicator

Unit

2022

2021

2020

Percentage of employees aged 30 and below

%

22.21

20.12

14.13

Percentage of employees aged 51 and above

%

9.14

8.94

4.82

%

68.65

70.93

81.05

Indicator
Total training investment

Number of employees who participated in company-paid diploma programs

Total investment in company-paid diploma programs for employees

104

11.23

Average training time for line-level employees

hour

41.40

41.65

35.34

Average training time for mid-level management

hour

40.44

31.62

17.54

Occupational health and safety*
Indicator

Unit

2022

2021

2020

Employee safety training timehour

631,233.50

450,918.00

300,011.50

51

44

45

Work-related fatalities of employees

RMB10,000

person-time
personTotal lost worktime rate of employees**

Lost time injury frequency rate of employees***Work-related injuries of contractors

Work-related fatalities of contractors//

person-time
personTotal lost worktime rate of contractors**//

1,055.921

922.510634.5801,307.74

2,234.87

924.794

53

159.33

-

-

1.25

-

1

0.14

-

* Not including the data of Rudong Base.
** Total lost worktime rate = (Total lost hours/Total hours worked in the reporting period)×1,000,000*** Lost time injury frequency rate = (Number of lost time injuries/Total hours worked in the reporting period)×1,000,000--

Indirect economic impact
Indicator

Unit

2022

2021

2020

Employee volunteer hours

hour

30,348

16,532

15,544

RMB10,000

15,727

4,676

14,879Economic and Governance Performance
Economic performance

Employee training

Total employee training time

2020

37.99

Donations

Employee composition by age

Percentage of employees aged between 31 and 50

2021

32.71

Lost time injury frequency rate of contractors ***Employee composition by gender

Percentage of female employees in management

2022

hour

Work-related injuries of employees

Indicator

Number of female employees in management

Unit

Average training time for senior management

Total investment in protective gears

Employee composition by level

Percentage of middle-level managers

Indicator

Unit

2022

2021

2020

RMB10,000

387.76562.16391.81hour

personRMB10,000

1,052,512.80

753,012619,287

2.92

2.55

3.30

79

35

11

Indicator

Unit

2022

2021

2020

Total assets

RMB100 million

2,445

2,465

2,480

Sales revenue

RMB100 million

943

973

738

RMB100 million

61

64

62

Total taxes paid
Total profit
Net profit

RMB100 million
RMB100 million

51
81

47
84

35
73

105

2022 APP 中国可持续发展暨 ESG 报告

Assurance Statement

Places of origin for APP China's pulp procurement*

Assurance Statement

Region

2022

2021

2020

China

45.03%

39.89%

43.25%

North America

8.14%

12.88%

18.49%

Other Asian regions

31.27%South America

33.49%

9.55%

Europe

5.64%

6.01%

Oceania28.69%

4.23%

7.96%

0%

5.01%

0.14%

0.32%

*The changes in the proportion of each origin of procurement are mainly determined by product quality and relevant market price.

Materials
Indicator
Total amount of wood chips purchased
Amount of certified wood chips*

Proportion of certified wood chips

Total amount of wood pulp purchased
Amount of certified wood pulp*

Proportion of certified wood pulp

Total amount of waste paper purchased*Including CFCC/PEFC Certification and FSC Certification.

Unit

2022

2021

2020

10,000 tons

1,390.55

1,129.64

874.50

%

18.88

21.13

26.95

10,000 tons

262.54238.69235.67

10,000 tons

752.82692.10626.41

%

20.55

17.96

24.20

10,000 tons
10,000 tons

154.72124.3052.97

151.60

52.82

10.39

Anti-corruption
Indicator

Unit

2022

2021

2020

Number of governance agency members reached by anti-corruption policies and procedures

person20

14

15

Number of governance agency members receiving anti-corruption training

personNumber of senior-level managers receiving anti-corruption training

personNumber of middle-level managers receiving anti-corruption training

person

1,995

1,627

1,917

Number of line-level employees receiving anti-corruption training

person18,377

16,676

15,363

Number of incidents of termination or non-renewal of contracts with suppliers due to corruption*

case

19

12

-

Percentage of governance agency members reached by anti-corruption policies and procedures

Percentage of governance agency members receiving anti-corruption training

Percentage of senior-level managers receiving anti-corruption training

Percentage of middle-level managers receiving anti-corruption training

Percentage of line-level employees receiving anti-corruption training

%

100

100

100

%

100

100

100

%

%

%

20

196

100

100

100

14

183

100

100

100

15

160

100

100

100

*In advocacy for a culture of integrity and compliance, APP China requests all suppliers to sign the Sinar Mas Supplier/Partner Pledge on Business
Compliance and Integrity and the Corporate Social Responsibility Statement and Pledge . The percentage of suppliers to whom anti-corruption
policies have been communicated to is 100%.

106

107

APP China Sustainability/ESG Report 2022

108

Assurance Statement

109

APP China Sustainability/ESG Report 2022

GRI Standards (2021) Content Index

GRI Standards (2021) Content Index
Statement of use

APP China has reported in accordance with the GRI Standards for the period from January 1, 2022 to December
31, 2022.

GRI 1 used

GRI 1: Foundation 2021

GRI Standard

Disclosure
2-1

2-2

2-3

2-4

2-5

2-6

2-7

2-8

2-9

2-12

GRI 2: General Disclosures
2021

2-13

2-14

2-16

2-17

2-22

2-23

2-24

2-25

2-26

2-27

2-28

2-29

2-30

GRI 3: Material Topics
2021
GRI 201: Economic
Performance 2016
GRI 203: Indirect Economic
Impacts 2016

GRI 204: Procurement
Practices 2016

110

3-1

3-2

Organizational details

Entities included in the organization's sustainability reporting

Reporting period, frequency and contact point

Restatements of information

External assurance

Activities, value chain and other business relationships

Employees

Inside back cover
107-110

4; 15-17; 98-99; 105
103

2-3; 30

Role of the highest governance body in sustainability
reporting

Inside back cover

Collective knowledge of the highest governance body

12-13; 15-17; 30

Delegation of responsibility for managing impacts

Communication of critical concerns

Statement on sustainable development strategy

Policy commitments

Embedding policy commitments

Processes to remediate negative impacts

Mechanisms for seeking advice and raising concerns

Compliance with laws and regulations

Membership associations

Approach to stakeholder engagement

Collective bargaining agreements

Process to determine material topics

List of material topics

Financial implications and other risks and opportunities
due to climate change

204-1

Inside back coverRole of the highest governance body in overseeing themanagement of impacts

Governance structure and composition

201-2

203-2

Inside back cover69; 103

Management of material topics

203-1

4; Inside back coverWorkers who are not employees

3-3

201-1

Page Numbers

Direct economic value generated and distributed

lnfrastructure investments and services supported

Significant indirect economic impacts

Proportion of spending on local suppliers

530

2-3; 95-96

2-3; 12-13

14-15; 60-61; 94-97

30-31; 61-64; 92-99; 106
60-61; 67-70; 95-96
60-61; 64; 95-96
102

8-11

15-19

60-61

18-19

18-19

12-13; 15-19; 30-36; 38-41; 42-99
4; 10530-36; 50-53
75-79

22-28; 34-36; 53; 71-72; 75-79; 89-91
98-99; 106

111

APP China Sustainability/ESG Report 2022

GRI Standard
GRI 205: Anti-corruption
2016
GRI 301: Materials 2016
GRI 302: Energy 2016

Disclosure
205-2

205-3

301-1

301-2

302-1

302-4

303-1

GRI 303: Water andEffluents 2018

303-2

303-3

303-4

303-5
304-1
GRI 304: Biodiversity 2016

304-2

304-3

304-4

305-1

GRI 305: Emissions 2016

305-2

305-3

305-5

305-7

306-1

GRI 306: Waste 2020

306-2

306-3

306-4

306-5

308-1
GRI 308: Supplier
Environmental Assessment
2016
308-2
GRI 401: Employment 2016

401-1

401-2

401-3

403-1

403-2

GRI 403: Occupational
Health and Safety 2018

403-3

403-4

403-5

403-6

112

Communication and training about anti-corruption policies
and procedures

Confirmed incidents of corruption and actions taken

Materials used by weight or volume

Recycled input materials used

Energy consumption within the organization

Reduction of energy consumption

Interactions with water as a shared resource

Management of water discharge-related impacts

Water withdrawal

Water discharge

Water consumption

Operational sites owned, leased, managed in, or adjacentto, protected areas and areas of high biodiversity value
outside protected areas

Significant impacts of activities, products and services on
biodiversity

Habitats protected or restored

IUCN Red List species and national conservation list species
with habitats in areas affected by operations

Direct (Scope 1) GHG emissions

Energy indirect (Scope 2) GHG emissions

Other indirect (Scope 3) GHG emissions

Reduction of GHG emissions

Nitrogen oxides (NOX), sulfur oxides (SOX), and othersignificant air emissions

Water generation and significant waste-related impacts

Management of significant waste-related impacts

Waste generated

Waste diverted from disposal

GRI Standards (2021) Content Index

Page Numbers
94-98; 106
106

106

106

50-53; 100

23-26; 30-36; 51-52

23-26; 48-49; 54-56
48-49; 54-56
100-101

100-101

100-101
38-41; 47
38-41; 47
38-41

38-41

50-53

50-53

50-53

30-36; 52-53

56; 101-102
57

23-26; 48-49; 57

Negative environmental impacts in the supply chain andactions taken

98-99

Benefits provided to full-time employees that are notprovided to temporary or part-time employees

60-61

Occupational health and safety management system

65-66; 69-70

Parental leave

Hazard identification, risk assessment, and incident
investigation

Occupational health services

Worker participation, consultation, and communication on
occupational health and safety

Worker training on occupational health and safety

Promotion of worker health403-7
GRI 403: Occupational
Health and Safety 2018

403-8

403-9

403-10

GRI 404: Training and
Education 2016

404-1

404-2

GRI 405: Diversity and Equal
405-1
Opportunity 2016

GRI 406: Nondiscrimination 2016

GRI 408: Child Labor 2016

GRI 409: Forced orCompulsory Labor 2016
GRI 413: Local
Communities 2016
GRI 414: Supplier Social
Assessment 2016

GRI 416: Customer Healthand Safety 2016
GRI 417: Marketing andLabeling 2016

GRI 418: Customer Privacy
2016

406-1

408-1
409-1
413-1
413-2

414-1

414-2
416-1
416-2
417-1
418-1

Prevention and mitigation of occupational health and safety
impacts directly linked by business relationships

Page Numbers
65-70

Workers covered by an occupational health and safety
management system

65-70

Work-related ill health70; 105

Work-related injuries

Average hours of training per year per employee

105104-105

Programs for upgrading employee skills and transition
assistance programs

61-64; 77

Incidents of discrimination and corrective actions taken

Did not occur

Diversity of governance bodies and employees

Operations and suppliers at significant risk for incidents ofchild labor

Operations and suppliers at significant risk for incidents offorced or compulsory labor

103; 104

Did not occur
Did not occur

Operations with local community engagement, impact
assessments, and development programs

38-41; 44-47; 75-79

New suppliers that were screened using social criteria

98-99

Operations with significant actual and potential negative
impacts on local communities

Negative social impacts in the supply chain and actions
taken

45-47; 78-79
98-99; 106

Assessment of the health and safety impacts of product andservice categories

27-28; 71-74; 89-91

Requirements for product and service information andlabeling

14; 34-36; 53; 89-91

Incidents of non-compliance concerning the health andsafety impacts of products and services

Substantiated complaints concerning breaches of customer
privacy and losses of customer data

Did not occur

Did not occur

57; 10257; 102

New employee hires and employee turnover

Disclosure

57; 102

Waste directed to disposal

New suppliers that were screened using environmental
criteria

GRI Standard

98-99

103

104

65-66; 68
70

65-70

67-70; 105
70

113

APP China Sustainability/ESG Report 2022

TCFD Index
TCFD Recommended Disclosures

Page Numbers

Governance: Disclose the company's governance around climate-related risks and opportunities.
a. Describe the board's oversight of climate-related risks and opportunities.

30

b. Describe management's role in assessing and managing climate-related risks and opportunities.

Strategy: Disclose the actual and potential impacts of climate-related risks and opportunities on the company's
businesses, strategy, and financial planning where such information is material.
a. Describe the climate-related risks and opportunities the company has identified over the short, medium, andlong term.
b. Describe the impact of climate-related risks and opportunities on the company's businesses, strategy, andfinancial planning.

c. Describe the resilience of the company's strategy, taking into consideration different climate-related scenarios,
including a 2° C or lower scenario.

Risk Management: Disclose how the company identifies, assesses, and manages climate-related risks.

30

22-28; 32-36; 89-91
12-13; 22-28; 31-36; 89-91
31

a. Describe the company's processes for identifying and assessing climate-related risks.

30-33

c. Describe how processes for identifying, assessing, and managing climate-related risks are integrated into thecompany's overall risk management.

32-33

b. Describe the company's processes for managing climate-related risks.

30-33

Metrics and Targets: Disclose the metrics and targets used to access and manage relevant climate-related risks
and opportunities where such information is material.
a. Disclose the metrics used by the company to assess climate-related risks and opportunities in line with its
strategy and risk management process.

12-13; 50-53

c. Describe the targets used by the company to manage climate-related risks and opportunities and performanceagainst targets.

12-13; 31-36

b. Disclose Scope 1, Scope 2, and, if appropriate, Scope 3 greenhouse gas (GHG) emissions, and the related risks.

50-53

About this Report
This is the 16th Sustainability Report issued by Sinar Mas Paper (China) Investment Co., Ltd. and its subsidiaries or other affiliatedenterprises (referred to as APP China). The report is released in both Chinese and English. The English report is translated from the

Chinese report. If there is any discrepancy between the two reports, the Chinese version shall prevail. The Board of Directors, as the
top governance body of APP China, is ultimately responsible for reviewing and approving the information disclosed in this report.

Reporting Boundary and Scope
The time span of this report is from January 1, 2022 to December 31, 2022. Our last Sustainability Report was released in

November 2022. Data in "Company Profile", "Economic performance", " Places of origin for APP China's pulp procurement"and "Materials" relate to Sinar Mas Paper (China) Investment Co., Ltd. and its subsidiaries or other affiliated enterprises. Cases
and other data in the report are collected from APP China Headquarters, pulp & paper mills, and APP China Forestry Business
Unit, unless otherwise stated.

・ APP China Headquarters
・ Gold East Paper (Jiangsu) Co., Ltd. (Gold East Paper)・ Hainan Jinhai Pulp & Paper Co., Ltd. (Hainan Jinhai Pulp &Paper)
・ Guangxi Jingui Pulp & Paper Co., Ltd. (Guangxi Jingui Pulp &Paper)
・ Ningbo Asia Pulp & Paper Co., Ltd. (Ningbo Asia)
・ Shandong Bohui Paper Co., Ltd. (Bohui Paper)
・ Gold Hongye Paper Group Co., Ltd. (Gold Hongye Paper)

・ Gold Hongye Paper (Nantong) Co.,Ltd. (Rudong Base)・ Hainan Gold Hongye Paper Co., Ltd. (Hainan Gold
Hongye)・ Hainan Gold Shengpu Paper Co., Ltd. (Hainan Gold
Shengpu)
・ APP China Forestry Business Unit (APP China
Forestry, including Forestry Business Headquarters,
Hainan, Guangxi, and Guangdong BUs, and Lancang,
Wenshan, Ganzhou and Henan Sub-BUs)

As APP China completed the acquisition of Bohui Paper in July 2020, we started including relevant data from Bohui Paper in our reportfrom our 2021 Report.

Reporting Framework
The report has been prepared in accordance with the core option of GRI Standards (2021) issued by the Global Sustainability Standards
Board (GSSB), the Global Compact Ten Principles, the TCFD recommendations issued by the Task Force on Climate-Related Financial

UN Global Compact Ten Principles Index

Disclosures (TCFD), the Pulp & Paper Products standard and the Forest Management standard issued by the Sustainability AccountingStandards Board (SASB), the S&P Global Corporate Sustainability Assessment (CSA), and papermaking industry clean production andemissions standards.

Theme
Human Rights

Principle
Principle 1: Businesses should support and respect the protection of internationallyproclaimed human rights; andPrinciple 2: make sure that they are not complicit in human rights abuses.

Principle 3: Businesses should uphold the freedom of association and the effective
Labor

recognition of the right to collective bargaining;

Principle 4: the elimination of all forms of forced and compulsory labor;
Principle 5: the effective abolition of child labor; andPrinciple 6: the elimination of discrimination in respect of employment and occupation.
Principle 7: Businesses should support a precautionary approach to environmental
Environment

Anti-corruption

114

challenges;

Principle 8: undertake initiatives to promote greater environmental responsibility; andPrinciple 9: encourage the development and diffusion of environmentally friendly
technologies.

Principle 10: Businesses should work against corruption in all its forms, including
extortion and bribery.

Page Numbers
60-61; 65-70; 73-79; 95-96; 98-99
60-61; 65-70; 95-96; 98-99
60-64

60-61; 98-99
60-61; 98-99

60-61

30-36; 38-41; 44-57; 89-91
30-36; 38-41; 44-57; 89-91
22-28; 48-57; 89-91
92-98; 106

Content and Indicator Selection
This report was prepared in accordance with the GRI principles of materiality, stakeholder inclusiveness, sustainability context, andcompleteness, etc. At the preliminary stage, our work group conducted policy analysis, industry issues analysis, the core issues andindicators benchmark of ESG mainstream information disclosure frameworks and rating systems, stakeholder surveys, and field visits
to our headquarters and pulp & paper mills to collect the management approaches, specific practices and performance indicators onsustainability/ESG issues most relevant to APP China.

Report Assurance
APP China commissioned Technischer Überwachungs-Verein (TÜV) to assess the reliability, objectivity, and transparency of this report.
Please refer to the "Assurance Statement" for further details.

Contact Us
We sincerely welcome readers' comments and suggestions regarding this report and our work.
Readers can contact us by email: csr@app.com.cn.

Address: 65/F, No. 501 Dongdaming Road, Hongkou District, Shanghai
Phone: +86-21-2283-8888
Fax: +86-21-2283-9063
Zip Code: 200080

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