2020 SUSTAINABILITY REPORT Contents 2 About CEHL 2 About this Report 7 Chairman’s Message 9 Executive Preface 11 Sustainability Governance Structure 17 Stakeholder Engagement 23 Adhere to Green Development 29 Protecting Employee Rights 34 Creating Multiple Values 37 Developing with the Community 39 Appendix: Compliance Performance 40 Appendix: CEHL Green Bond Report 42 Appendix: KPIs Summary 46 Appendix: ESG Guide and GRI Standards Content Index About CEHL Capital Environment Holdings Limited (“CEHL” or the “Company”) (Stock Code: 3989) and its subsidiaries (collectively as the “Group”) are leading providers of integrated waste treatment solutions and environmental protection infrastructure construction services in China and New Zealand, held by Beijing Capital Group Company Limited (“Beijing Capital Group”)1. Currently, the Group’s business covers more than 20 major provinces and cities and the surrounding areas in China, and has established a national network of vertically integrated local waste systems in New Zealand. The Group is committed to developing into a technology-driven and investment-driven large-scale environmental protection enterprise, adhering to the spirit of craftsmanship and focusing on the waste-to-energy project, urban-rural sanitation integration projects, organic waste anaerobic projects and other technological research and development and technical collaboration. The Group is actively pursuing the “Ecology+” strategy, making technological innovation an important driving force in the corporate development, striving to enhance the innovation capabilities, leading efficient, green and smart development, and striving to become a leading integrated eco-environmental service provider in the area of solid waste in China. About this Report The Group is pleased to publish the fourth Sustainability Report (the “Report”) to present the Group’s latest policies, initiatives and performance in detail in sustainability and to address stakeholders’ concerns about the Group’s sustainability development. Available in both Chinese and English, the Report has been uploaded to the websites of the Stock Exchange of Hong Kong Limited (“SEHK”) and the Company www.cehl.com.hk. Yutian County Integrated Waste Project Ma’anshan Dismantling Plant REPORTING BOUNDARY The Report covers the Group’s sustainability development performance between January 2020 and December 2020 (the “Year”). The boundary of the Report mainly covers 27 projects (referred to hereafter as the “Reporting Projects”) that were in full operation during the Year, including waste-to-energy, landfill, waste storage, waste cleaning and waste appliances dismantling, etc. Taking into consideration the access and ownership of data, the Report has not yet covered the joint ventures of which the Group holds non-controlling interests and overseas projects (in New Zealand). The projects that have been included in investment reserve but not yet in full operations are also excluded2. In the future, the Group will continuously improve the internal data collection system to further expand the scope of disclosure if possible. Hangzhou Anaerobic Treatment Project Nanchang Quanling Power Plant 1 Beijing Capital Group is a state-owned group company supervised by the Stated-owned Assets Supervision and Administration Commission of Beijing. 2 During the year, the Group’s projects in reserve in mainland China reached a total of 71 projects (including 25 waste-to-energy projects, 7 landfill projects, 7 anaerobic treatment projects, 18 waste cleaning, collection, storage and transfer projects, 10 hazardous waste treatment projects, 2 waste appliances dismantling projects and 2 biomass power generation projects) 2 Capital Environment Holdings Limited About this Report Project name Project Project companies Business nature Region Abbreviation Nanchang Solid Waste Incineration Power Nanchang Quanling Nanchang Capital Environment Waste-to-energy East China Generation Plant, Jiangxi Province Power Plant Energy Co., Ltd. Gao’an Solid Waste Incineration Power Gao’an Power Plant Gaoan Eacoon Renewable Generation Plant, Jiangxi Province Resources for Thermal Power Generation Company Limited Ruijin Solid Waste Incineration Power Ruijin Power Plant Ruijin Capital Environmental Generation Plant Project, Jiangxi Province Energy Co., Ltd. Guangchang County Township Waste Integrated Guangchang Guangchang Capital Environment Waste collection, Processing Project, Jiangxi Province Processing Project Co., Ltd. storage, transfer and landfill Shicheng County Township Integrated Processing Shicheng Processing Shicheng Capital Environment Project, Jiangxi Province Project Limited Gao’an County Waste Collection and Transfer Gao’an Waste Gaoan Capital Environmental Project Collection and Sanitation Co., Ltd. Transfer Project Huainan Informal Domestic Waste Heaps Huainan Non- Huainan Capital Environmental Treatment Project, Anhui Province Conforming Recovery Engineering Co., Landfill Project Ltd. Ma’anshan Household Appliances Dismantling and Ma’anshan Anhui Capital Environmental Recycling and Recycling Project, Anhui Province Dismantling Plant Technology Company Limited disassembly of waste electrical and electronic equipment Yangzhou Kitchen Waste Anaerobic Treatment Yangzhou Anaerobic Yangzhou Capital Environmental Anaerobic treatment Project, Jiangsu Province3 Treatment Energy Investment Limited Project4 Hangzhou Xiaoshan Kitchen Waste Anaerobic Hangzhou Anaerobic Zhejiang Zhuoshang Environmental Treatment Project, Zhejiang Province Treatment Project Energy Company Limited Ningbo Capital Environment Kitchen Waste Ningbo Anaerobic Ningbo Capital Environment Anaerobic Treatment Project, Zhejiang Province Treatment Project Kitchen Waste Treatment Company Limited Yangzhou Hazardous Waste Treatment Project, Yangzhou Hazardous Yangzhou Capital Solid Hazardous waste Jiangsu Province Waste Treatment Environment Technology treatment Project Limited Sustainability Report 2020 3 About this Report Project name Project Project companies Business nature Region Abbreviation Suixian Domestic Waste-to-energy projects, Suixian power Suixian Capital Environmental Waste-to-energy Central Henan Province generation Energy Limited China project Nanyang Landfill Project, Henan Province Nanyang Landfill Nanyang Capital Environment Landfill Project Technology Company Limited Xihua County Solid Waste Collection and Transfer Xihua Collection and Xihua Capital Environment Waste collection, Project in Zhoukou City, Henan Province Transfer Project Sanitation Limited storage and transfer Suixian Township Solid Waste Collection and Suixian Collection Suixian Capital Environmental Transfer Project, Henan Province and Transfer Sanitation Limited Project Lushan County Waste Collection and Lushan Collection Lushan Capital Environment Transportation Integration Project, Henan and Transfer Energy Company Limited Province Project Qixian Rural Solid Waste Collection Project, Qixian Collection Qixian Capital Environmental Henan Province and Transfer Energy Company Limited Project Zhengyang County Townership Solid Waste Zhengyang Zhengyang Capital Environmental Collection and Transfer Project, Henan Collection and Energy Company Limited Province Transfer Project Qianjiang Waste Collection and Transfer Project, Qianjiang Collection Qianjiang Capital Bolang Green Hubei Province and Transfer Energy Limited Project Suiping County Urban and Rural Sanitation Suiping Sanitation Suiping Capital Environmental Cleaning Integration Project, Henan Province Project Sanitation Company Limited Duyun Solid Waste Incineration Power Generation Duyun Power Plant Duyun Capital Environment Waste-to-energy5 Southwest Plant, Guizhou Province Company Limited China Beijing Chaoyang District Road Cleaning Project Chaoyang Cleaning Beijing Capital Environmental Cleaning North (Second Section) Environmental Health Service Project Sanitation Company Limited China Center Beijing Yanqing District Xiao Zhangjiakou Yanqing Project Beijing Capital Environment Waste collection, Comprehensive Waste Treatment Engineering Co., Ltd. storage and transfer Engineering PPP Project Yutian County Solid Waste Collection and Yutian County Yutian Capital Environmental Transfer Integration Project, Tangshan Integrated Energy Co., Ltd, Environmental City, Hebei Province Waste Project Health Branch Linyi Solid Waste Collection and Transfer Project, Linyi Collection and Linyi Capital Environmental Shanxi Province Transfer Project Hygiene Limited Huizhou Waste Incineration Power Project, Huizhou Power Huizhou Guanghui Energy Waste-to-energy South Guangdong Province Project Company Limited China 3 Referred to as Yangzhou Kitchen Waste Collection, Transfer and Processing BOT Project, Jiangsu Province in 2018 Report. 4 Referred to as Yangzhou Kitchen Waste Project in 2018 Report. 5 Operations also include collection, storage and transfer of waste. 4 Capital Environment Holdings Limited About this Report Compared with the 2019 Sustainability Report, 7 new operating projects have been added in this report and are highlighted in the above table. At the same time, 5 projects of the Group are under planning for upgrading or discontinuation of operation and are therefore not included in the Report. These projects are: Shangrao City Domestic Waste Sanitary Landfill, Jiangxi Province; Weng’an Domestic Waste Landfill, Guizhou Province; Huai’an Waste Vehicles and Household Appliances Dismantling and Recycling Project, Jiangsu Province; Yingde Laohuyan Domestic Waste Innocuous Treatment Landfill Site, Guangdong