Sustainability Commitment and Identification of Material Issues
Sustainability Commitment
To achieve the corporate mission of “For You Forever,” Longfor has formed five core pillars of its sustainable development strategy guided by the United Nations 2030 Sustainable Development Goals (SDGs), namely, "Best Service", "Best Public Welfare","Best Cooperation", "Best Nature",and "Best Care", with "Compliance Management" and "Sustainable Development" as the strategic bases to strengthen the foundation of the Group's sustainable development and promote the sustainable development of the enterprise.
Material Issues

Longfor Group strictly adheres to the Company Law of the People's Republic of China and all other applicable laws and regulations. We have established a sound and efficient corporate governance structure to enhance its corporate governance continuously. As the highest governance body of the Group, the Board of Directors is responsible for leading and supervising the Group's business, strategic policies, and performance, as well as performing corporate governance duties. The Board consists of an Audit Committee, a Remuneration Committee, a Nomination Committee, an Investment Committee, and an Environmental, Social, and Governance Committee to ensure the Board's effective operation.

Longfor Group has established the Board Diversity Policy, because we view board diversity as crucial for achieving sustainable development. We consider various factors, including but not limited to professional experience, cultural and educational background, specialization skills, gender, age, and length of service, when selecting board members. In addition, we regularly review the implementation of board diversity to promote balanced and sustainable corporate development.

Board Diversity Policy
ESG Committee

Longfor Group continues to enhance the Company's ESG governance and refine the ESG governance structure. We have established a Board-level ESG Committee, chaired by Mr. Chan Chi On, Derek, an independent non-executive director, with other members, including the Chairman of the Board,one executive director and two independent non-executive directors, to assist the Board in supervising the sustainable development management policy and to ensure the balance and effectiveness of ESG decisions. The ESG Committee is accountable for the overall management of ESG-related issues. Its primary duties include formulating and deliberating the Group's ESG strategic direction, reviewing ESG risks and opportunities, and evaluating ESG performance. In addition, the Company has established an ESG Working Group to promote the implementation of ESG work by connecting all business lines and functional departments and providing the ESG Committee with regular reports and updates. The Terms of Reference of the ESG Committee of Longfor Group outlines the roles and responsibilities of the ESG Committee.In 2023, the ESG Committee held two meetings with 100% attendance. We continue to improve our ESG management system and establish multi-dimensional goals for the environment, society, and governance to enhance the Longfor Group's ESG management capability on a comprehensive and multi-level scale.

Terms of Reference of the ESG Committee
Board of Directors
ESG Committee
ESG Working Group
Risk Control

Longfor Group adheres to the Company Law of the People's Republic of China, the Securities Law of the People's Republic of China, the Companies Ordinance of Hong Kong, the Rules Governing the Listing of Securities on the Stock Exchange of Hong Kong Limited, and other relevant laws and regulations, as well as advanced international laws and regulations. Furthermore, we refer to our peers and the Committee of Sponsoring Organizations of the Treadway Commission (COSO) Internal control framework. We have established the Longfor Risk Management System, Empowerment Platform Audit Accountability Mechanism, and other internal policies to ensure the quality of risk management and the effective implementation of duties on all levels.

Longfor Group applies a "Three Lines of Defense" approach to ESG risk management. We conducted self-inspection and self-correction activities in 2023, primarily in the first and second lines of defense, and enhanced the effectiveness of relevant systems and the compliance of business operations in response to the issues identified during self-inspection. The third line of defense utilizes case advocacy and other methods to strengthen business empowerment and enhance the cohesion and flexibility of the connection with the business.

01First Line of Defense
02Second Line of Defense
03Third Line of Defense

Defense Line

Three Lines of Defense

Responsible Department

Management of Business Departments
General Manager of Business
CEO (Leader)
CFO (Deputy Leader)
Audit Committee
Internal Audit Department
Safety and Innovation Management Department
Integrity and Compliance

Longfor Group adheres to the Anti-Money Laundering Law of the People's Republic of China, the Anti-Unfair Competition Law of the People's Republic of China, the Prevention of Bribery Regulations, and other relevant national and local policies and regulations. The Group maintains a "zero tolerance" approach towards corruption and bribery. The day-to-day supervision and management of business ethics issues are entrusted to the Group's Audit Committee. In 2023, we updated the Code of Longfor Business Conduct which encompass anti-corruption and bribery, anti-monopoly and unfair competition, anti-money laundering, and whistleblowing principles. All employees, including senior management and new hires, were required to sign the Code of Conduct, resulting in a 100% signing rate for all employees, including directors and senior management personnel in 2023. The Group distributed the Anti-Bribery and Anti-Corruption Rules to all employees, explicitly forbidding any form of corruption and bribery and outlining a clear reporting and handling process. This significantly increased employee awareness of anti-corruption and integrity.

We provide multiple channels for reporting business ethics issues. We have revised the reporting process and procedures in 2022 and designated a person in the 400 customer service center to answer integrity reporting calls to improve efficiency. The Company has formulated the Whistleblower Protection Policy to enhance the whistleblower protection mechanism.

To foster a transparent and ethical business environment and enhance the awareness of anti-corruption among employees, contractors, and suppliers, Longfor conducts anti-corruption training every year. In 2023, the Group organized four special integrity training sessions for the Board of Directors and senior management. Additionally, a total of 532 business ethics training sessions were held for all employees (including contractors and part-time employees) through online training, reaching over 65,000 viewers. More than 6,500 people completed the training, accounting for a total of over 3,824 training hours, and achieved a 100% pass rate on the business ethics examination.