The Group carries out risk identification work based on the Risk Management System (《風險管理制度》), and closely centered around the principles of strategic orientation, comprehensiveness, grading and classification, and risk-benefit matching. Every year, the Group collects the risks identified from the departments in charge of the Company’s risk management and its subsidiaries, evaluates the importance of the risks, scores and ranks the risks in order of importance based on the degree of risk impact and likelihood of occurrence, and formulates countermeasures. 

The Group regularly organizes relevant departments to carry out risk management inspections in key areas, focusing on risk identification and early prevention, and continuously promotes the improvement of the Group’s risk management system.

The Group fully integrates ESG factors and concepts including climate change related risks into the overall risk management process of its projects:

• Summarize various ESG risks identified by the Group, such as health and safety and extreme weather events in the Internal Control Report (《內控報告》). Conduct qualitative and quantitative assessments of each risk based on the gravity of its implications on the Group’s strategic and operational objectives and its probability;

• In the selection of project vehicle equipment, new energy vehicles are actively used to reduce emissions;

• Fully consider employees’ salary, welfare benefits and other rights and interests in the project review process;

• During the investment and merger process, combined with national laws and regulations and paying attention to local regulations, the party under investigation is required to issue a written statement on whether it has been subject to environmental protection administrative penalties or has potential penalties, and provide relevant materials;

• Establish the Management System of Accident and Incident (《事故事件管理制度》) to standardize the specific process for employees to identify and report risks, and for higher-level units to manage and respond to the risks;

 • Set up the timetable for the rectification and treatment of identified risks. The functional department for risk management monitors the progress of rectification by the responsible departments.