Golden Nest Capital’s Implementation of Climate-Related Risks Management & Disclosure

Golden Nest Capital Management Hong Kong (the “Company”) has integrated climate-related considerations from the perspectives of governance, investment, and risk management following the Hong Kong SFC’s regulatory requirements regarding climate-related risks in August 2021.

The Board of Directors (the “Board”) of the Company is accountable for appropriately managing exposure to climate-related risks. The Board has approved the Climate-related Risk Policy, which outlines the approach and procedures that the Company takes in tackling the climate-related risks. The Board’s roles include i) approving the framework and policies to assess and manage the climate-related risks affecting the portfolios managed by the Company; ii) setting clear roles and responsibilities of the Board and senior management; iii) overseeing the incorporation and implementation of climate-related considerations into the investment and risk management processes and progresses; and iv) ensuring that senior management have adequate understanding of climate-related risks, and is equipped with appropriate expertise to manage climate-related risk, as needed.

Additionally, the Board has appointed the Company’s Chief Operation Officer (“COO”) Mr Yuan ZI as the responsible person to monitor the status of climate-related risks exposure, establish internal control and develop action plans in managing climate-related risks. The COO closely monitors the climate-related risks by reviewing risk reports and metrics regularly. Once any adverse situation which needs senior management’s attention is identified, the COO will report to the CIO and escalate to the Board to control such risks. Steps of mitigation will then be taken by the COO and designated staffs following the direction of the Board.

The investment team will make reasonable efforts to identify, assess and integrate climate-related considerations in the investment process, where data is available from investee companies’ disclosure or external ESG data providers. Alternatively, the investment team tries to incorporate such risks and opportunities evaluation when analyzing the investee companies’ business model and competition landscape according to our proprietary six-dimension framework.

Further, the climate-related risks will be scrutinized in the risk management process. The Chief Risk Officer will hold meeting at least annually to assess and monitor the impact of climate-related risks on our portfolio. If extreme issues related to any climate-related risks arise that would adversely affect our portfolio, CRO will report to the senior management and the Board, who will then take reasonable steps to resolve/mitigate the risks on a timely basis.

Currently, our assessment concludes that climate-related risks are relevant, but not material for our Greater China equity long short strategy. To comply with the regulatory requirements’ baseline standards, we will make appropriate disclosures to investors about our climate related risks at portfolio level through a combination of qualitative and quantitative approach. The first such disclosure will be covered in our quarterly memo starting in YR 2023.