China Merchants Bank : Sustainability Report 2024

China Merchants Bank Co., Ltd.

Sustainability Report 2024

H Share Stock Code: 03968

Content

I. About the Report .............................................................................................................................................................................4

II. The Chairman's Statement ............................................................................................................................................................7

III. The President's Statement .........................................................................................................................................................10

IV. Our Sustainability Footprints in 2024 ........................................................................................................................................ 14

V. About CMB .................................................................................................................................................................................... 17

(I) Company Profile ............................................................................................................................................................................................ 17

(II) Organizational Structure ............................................................................................................................................................................... 19

(III) Honors and Awards ..................................................................................................................................................................................... 20

VI. Sustainability Management ........................................................................................................................................................ 26

(I) Sustainability Strategy ................................................................................................................................................................................... 26

(II) Sustainability Governance Framework ........................................................................................................................................................ 29

(III) Sustainability Issues Materiality Assessment ............................................................................................................................................. 32

(IV) Communications with Stakeholders ........................................................................................................................................................... 49

VII. Environmental: Supporting Green Transition, Serving the Development of a Beautiful China .......................................... 52

(I) Climate Change Tackling ............................................................................................................................................................................... 53

(II) Green Finance .............................................................................................................................................................................................. 90

(III) Environmental Impact Management in Operations .................................................................................................................................... 98

Environmental Key Performance ..................................................................................................................................................................... 110

VIII. Social: Upholding Business for Good, Co-Creating a Beautiful Social Landscape Together ......................................... 121

(I) Technology Finance ..................................................................................................................................................................................... 122

(II) Inclusive Finance ........................................................................................................................................................................................ 128

(III) Pension Finance ........................................................................................................................................................................................ 137

(IV) Digital Finance .......................................................................................................................................................................................... 140

(V) Consumer Rights Protection ...................................................................................................................................................................... 149

(VI) Cybersecurity, Information, and Data Security ......................................................................................................................................... 176

(VII) Customer Privacy Protection ................................................................................................................................................................... 180

(VIII) Employees .............................................................................................................................................................................................. 185

(IX) Contributions to the Society ...................................................................................................................................................................... 207

(X) Supply Chain Management ....................................................................................................................................................................... 220

Feature: Expanding Domestic Demand to Boost the "Dual Engines" of Investment and Consumption ........................................................ 224

Feature: Prioritizing People's Well-being, Continuously Safeguarding and Improving Livelihoods ............................................................... 230

Feature: Proactive Initiatives to Serve High-Level Opening-Up ..................................................................................................................... 233

Feature: Unwavering Commitment to Coordinated Regional Development ................................................................................................... 237

Social Key Performance .................................................................................................................................................................................. 241

IX. Governance: Strengthening Standardized Operations, Building a Solid Foundation for High-Quality Development .... 261

(I) Corporate Governance ................................................................................................................................................................................ 262

(II) Financial Risk Management ....................................................................................................................................................................... 272

(III) Business Ethics ......................................................................................................................................................................................... 279

Governance Key Performance ........................................................................................................................................................................ 293

X. Independent Assurance Report ................................................................................................................................................ 301

XI. Content Index ............................................................................................................................................................................ 302

(I) Content Index of Guidelines No.14 of Shanghai Stock Exchange for Self-Regulation of Listed Companies - Sustainability Report

(Trial) ................................................................................................................................................................................................................ 302

(II) Content Index of HKEx's ESG Reporting Code ......................................................................................................................................... 305

(III) GRI Standards Content Index ................................................................................................................................................................... 313

XII. Reader Feedback ..................................................................................................................................................................... 320

I. About the Report

Since 2007, China Merchants Bank Co., Ltd. (referred to as "China Merchants Bank", "CMB", or "the Company") has annually published Social Responsibility/Sustainability Reports, focusing on disclosing sustainability-related information in the fields of environmental, social, and governance (ESG). This report is the 19th Social Responsibility/Sustainability Report released by the Company.

Reporting Scope



Organizational Scope: The report covers the Company, its subsidiaries including CMB Wing Lung Bank Limited ("CMB Wing Lung Bank"), CMB Financial Leasing Co., Ltd. ("CMB Financial Leasing"), CMB International Capital Holdings Corporation Limited ("CMB International Capital"), ​ CMB Wealth Management Company Limited ("CMB Wealth Management"), China Merchants Fund Co., Ltd. ("China Merchants Fund"), CIGNA & CMB Asset Management Company Limited ("CIGNA & CMAM"), China Merchants Bank (Europe) Co., Ltd. ("CMB Europe S.A."), as well as joint ventures such as CIGNA & CMB Life Insurance Co., Ltd. ("CIGNA & CMB Life Insurance") and Merchants Union Consumer Finance Company Limited ("MUCFC").



Time Frame: The report covers activities from January 1, 2024 to December 31, 2024, with some content going beyond these dates to ensure continuity.

Reporting Standards

As a company listed on the main boards of the Shanghai Stock Exchange (stock code: 600036) and the Hong Kong Stock Exchange (stock code: 03968), the report is prepared with reference to Guidelines No.14 of Shanghai Stock Exchange for Self-Regulation of Listed Companies-Sustainability Report

(Trial) and the Hong Kong Stock Exchange's Main Board

Listing Rules Appendix C2 Environmental, Social and

Governance Reporting Code. The disclosure of each indicator in this report can be found in the Index of Guidelines No.14 of

Shanghai Stock Exchange for Self-Regulation of Listed Companies-Sustainability Report (Trial) and the Index of Hong Kong Stock Exchange Environmental, Social, and Governance

Reporting Code in the Content Index.

In addition, the report is prepared with reference to the Global Sustainability Standards Board (GSSB) Sustainability Reporting

4 / 321

Standards (GRI Standards), with the disclosure of each indicator available in the Content Index under the GRI Standards Content Index.

This report follows the disclosure principles outlined in the Hong Kong Stock Exchange's ESG Reporting Code:



Consistency: Some key performance indicator statistical methods in this report have changed compared to the previous year. For details, please refer to the "Environmental Key Performance", "Social Key

Performance", "Governance Key Performance" sections for explanations of changes in indicators and data calibers.

•  Materiality: This report discloses the sustainability issues materiality assessment conducted during the year under "Sustainability Management", including the processes, methods, and results of identifying sustainability issues, the identified stakeholder groups, and their engagement modes and frequency. The process and results of the materiality analysis of sustainability topics are reviewed and approved by the CMB Board of Directors along with other contents in the report.

•  Quantification: This report uses a quantitative approach to measure applicable key performance indicators and discloses the measurement methods and processes. Specifically, in the "Environmental Key Performance" section, the report discloses the sources of standards and conversion factors used in calculating Scope 1, Scope 2, and Scope 3 greenhouse gas emissions and energy consumption.

Data and Information Sources

The information and data disclosed in this report are mainly obtained through the following methods:

•  Company's internal data collection system and related statistical reports

•  Excellent sustainability practice cases

•  Qualitative and quantitative information collection forms based on the reporting framework

All operational data disclosed in the report is sourced from the

China Merchants Bank Co., Ltd. Annual Report 2024 (referred to as "Annual Report"). In case of any discrepancies, the data in the Annual Report shall prevail. Unless otherwise specified, all monetary amounts in the report are presented in RMB.

Report Assurance

To ensure the authenticity and reliability of the report, this report has been independently assured by TÜV SÜD China Ltd., an independent third party, in accordance with the AccountAbility

1000 Assurance Standard v3 (AA1000AS v3) and the International Standard on Assurance Engagements 3000 (Revised): Assurance Engagements Other Than Audits or Reviews of Historical Financial Information (ISAE 3000

Revised). An independent assurance report has been provided, which can be found in the "Independent Assurance Report" section.

Accessing the Report

This report is available for viewing and downloading on the Shanghai Stock Exchange website (www.sse.com.cn), the Hong Kong Exchanges and Clearing Limited website (www.hkex.com.hk), and our Company's website (www.cmbchina.com).

II. The Chairman's Statement

2024 witnessed profound transformations in the global landscape, epochal shifts of our times, and historical changes that continue to reshape humanity. The convergence of a new round of technological revolution, industrial transformation, and the low-carbon transition has presented unprecedented opportunities and challenges for human development. Over the past year, China has made steady progress in advancing high-quality development and taken new and solid strides forward in the pursuit of Chinese modernization. Throughout the year, China Merchants Bank remained steadfast in nurturing a profound sense of national responsibility. By elevating our strategic vision, strengthening our commitment, and implementing concrete measures to advance ESG principles, we integrated sustainable development goals into daily operations and management, continuously composing new chapters in "advancing the era through commercial success".

With the Brush of Green, Co-Creating a Low-Carbon Future.

Guided by our mission to serve national ecological civilization development and the "Dual Carbon" strategy, we deepened our green transformation to foster harmony between humanity and nature. In 2024, we further refined our top-level green development design, establishing dual governance mechanisms for green finance business development and green operation management, while comprehensively optimizing our climate change response framework. We accelerated green finance innovation, deepened industry-specific operations, and strengthened green product and service development. Notably, we launched the industry's first comprehensive ESG Management Solution for Enterprises and issued the first "Climate Change Mitigation" Themed Green USD Bond among Chinese banks, injecting financial vitality into societal green development. We enhanced our green operation management system, expanded greenhouse gas emission accounting, and actively implemented emission reduction measures. Pioneering prefabricated decoration pilot projects, we improved the efficiency of low-carbon operations. Advocating green principles, we collaborated with clients and partners on initiatives such as carbon reduction, environmental protection, energy conservation, and afforestation, mobilizing public participation in ecological co-creation and fostering a new ethos of green civilization.

With a People-Centered Heart, Embracing Responsibility.

Upholding the ethos of serving the nation through finance, and nurturing a deep commitment to public welfare, we aligned our

growth with the broader national agenda. We enhanced our contributions to the real economy and social well-being, achieving synergy between economic and societal value. In 2024, we vigorously supported the development of modern industrial systems, prioritizing five strategic themes: technology finance, green finance, inclusive finance, pension finance, and digital finance. We increased resource allocation, optimized organizational structures, and cultivated distinctive advantages. We actively integrated into national regional strategies, aiding the development of Beijing-Tianjin-Hebei, the Yangtze River Delta, the Guangdong-Hong Kong-Macao Greater Bay Area, and the Chengdu-Chongqing Economic Circle. We advanced high-level opening-up by refining cross-border financial services, supporting Chinese enterprises in global expansion, and facilitating dual domestic-international circulation. Committed to rural revitalization, we expanded agricultural loans and deepened 25 years of targeted poverty alleviation in Wuding and Yongren, Yunnan Province, through education, healthcare, industry, ecology, and talent initiatives. Strengthening consumer rights protection, we broadened the reach, precision, and warmth of client services, meeting societal demands for high-quality financial solutions.

With the Helm of Governance, Steering Steady Growth. We have continuously enhanced the corporate governance standardization and effectiveness, thereby driving high-quality sustainable development through high-quality governance. In 2024, we further refined our corporate governance framework, optimized the composition of the Board of Directors, and improved the diversity and inclusivity of decision-making mechanisms. We strengthened the "Technology Empowering Bank" strategy by restructuring the Digital Transformation Committee into the Digital Finance Committee. Under strict adherence to technology ethics, we actively explored new models such as "AI + Finance" and "Human + Digital Intelligence", accelerating our transition from "Online CMB" to "Digital Intelligent CMB". We consolidated our fortress-style overall risk and compliance management system, maintaining robust asset quality and industry-leading loan loss provision coverage ratio, thereby safeguarding against systemic risks. We intensified the development of an "Integrity CMB", enhancing education on integrity culture and adopting a "zero-tolerance" stance in disciplinary oversight and accountability to foster a transparent and ethical work environment. We expanded platforms for employee growth, improved talent exchange mechanisms, refined hierarchical training systems, elevated professional competencies, and promoted shared growth and development between employees and the Company.

2025 marks the conclusion of the 14th Five-Year Plan and the formulation of the 15th Five-Year Plan. Anchored in our strategic objective to become a value-creating bank, we will resonate with the pulse of our times, align with the trajectory of civilizational progress, and remain deeply rooted in the well-being of the people. Through reform and innovation, we will explore, pioneer, and broaden the path of financial development with Chinese characteristics, and dedicate CMB's

strength to building China into a financial powerhouse!

Miao Jianmin

China Merchants Bank Co., Ltd.

Chairman

March 2025

III. The President's Statement

In 2024, amid a complex and volatile external operating environment marked by both opportunities and challenges, China Merchants Bank remained steadfast in our original aspiration of serving the nation through finance, anchored in the strategic vision of becoming a value bank, deepened our commitment to sustainable development, fostered a high-quality growth model driven by "strict governance and principled innovation", and strived to create greater comprehensive value for clients, employees, shareholders, partners, and society at large. This effort yielded "steady progress and upward momentum" in our operational performance, with MSCI upgrading our ESG rating to AAA.

Nourishing All Sectors, We Channeled Financial Vitality to

Support the Real Economy. Serving national strategies and supporting the real economy are integral to our mission. We rigorously implemented national macroeconomic policies and regulatory requirements, focusing on the development of a modern industrial system and new quality productive forces. By increasing resource allocation, enhancing product innovation, and accelerating service upgrades, we deepened our support for "Two Major Projects and Two New Initiatives", actively implemented financing coordination mechanisms for the real estate sector and small and micro enterprises, and provided financing totaling RMB3.5 trillion to 72,000 corporate clients and 5.46 million individual clients throughout the year. We prioritized the five strategic themes, by the end of 2024, loans for technology, green, and inclusive finance grew by 9.73%, 9.03%, and 10.37%, respectively, outpacing the Company's average loan growth. Services for the silver economy and digital economy also improved significantly, the cumulative number of personal pension accounts opened has exceeded 10 million, and the number of corporate clients using our financial cloud services has reached 615,200. We bolstered high-level opening-up by refining cross-border financial services to support the Belt and Road Initiative and Chinese enterprises' global expansion, achieving 19.26% and 19.40% growth in cross-border payments and client transactions. Aligning with national policies, we reduced fees for fund and insurance sales, lowered existing mortgage rates, and waived payment service charges, saving clients over RMB10 billion in total.

Empowering Millions, We Enhanced Public Well-Beijing Through Excellence in Service. Upholding the people-centered value orientation is at the core of our heart. We focused on enabling a better life for the people and advancing