The Company has established an energy management system in compliance with ISO 50001 standards, developed energy management policies, set medium- and long-term targets to achieve 100% renewable energy use by 2030 or before, explored ways to procure and use renewable energy, and specified annual Power Usage Effectiveness (PUE) targets, and regularly monitored the progress of target achievement. Through energy audits and online monitoring of energy consumption, we continue to explore energy-saving potential and enhance PUE. We actively adopt energy-efficient technologies, optimize the structure of energy consumption, promote the use of renewable energy, and strive to minimize the consumption of fossil fuels.

In terms of renewable energy use, we deploy photovoltaic (PV) power generation projects to maximize the consumption of renewable energy in close proximity to the sites. At the same time, we actively explore the application of energy storage technology by deploying lithium-ion battery energy storage systems for peak shaving and valley filling & emergency backup, improving power supply reliability and energy system flexibility, and enhancing economical effects. In addition, the Company provides environmental education and technical training to all employees, and encourages employees, suppliers, customers and users to implement energy-saving and carbon reduction in their daily operations activities.

As of the end of December 2023, Bohao has obtained four ISO 50001 Energy Management System certifications at both group level and site level, the total installed capacity of on-site energy storage was 6.88MWh, and on-site renewable energy generation was 469.51MWh.

The Company has incorporated climate-related physical risks into the comprehensive risk management system, systematically identifying and assessing climate-related risks and opportunities, and continuously monitoring them. The Company also fully considers climate factors in asset allocation and investment decisions to enhance the overall climate adaptation capability.

During the site selection and design stages for new projects and facilities, we incorporate climate change considerations into our decision-making process. We conduct comprehensive assessments of the disaster prevention and resilience conditions of potential locations, prioritizing areas with geological stability and low flood risks to enhance the climate resilience of the site. In addition, we strengthen the physical protection design of our data centers, improving the disaster resilience of our infrastructure across multiple dimensions, including power supply, cooling, networking, etc. The Company has also developed a comprehensive emergency response plan (ERP) for extreme weather events and regularly conducts emergency drills to reinforce our risk management and control capabilities.

The Company incorporates acute physical risks (e.g., risks from extratropical cyclones, flash floods, hail, floods, storm surges, tropical cyclones, etc.) and chronic physical risks (e.g., risks from drought stress, fire weather stress, heat stress, precipitation stress, rising mean temperatures, rising sea levels, etc.) into the risk management procedures and business continuity plan (BCP). We ensure timely access to relevant information and resources to monitor the impacts of climate change on the Company and to respond in a coordinated manner to climate-related social issues and public policies.

The Company conducts in-depth analyses of the impacts of climate change on the strategy, business and operations, and develops corresponding procedures and measures to prevent and/or minimize the potential damage caused by climate change. Simultaneously, we actively seize climate-related opportunities to meet new market demands and reduce operating costs. The Company's Board of Directors oversees climate-related matters and receives regular reports from management and functional departments on the progress of climate change response initiatives.

As the global economy gradually moves towards a low-carbon transition, the Company has recognized the potential financial impact of climate-related transition risks. The Company has leveraged the comprehensive risk management system to regularly identify, assess and respond to transition risks (e.g., risks from overseas, national and local climate change policies, regulatory requirements, trends in technological innovations, market sentiments, changes in consumer preferences, etc.), and to continuously monitor them to ensure proper management of potential transition risks and enhance climate resilience.

In terms of low-carbon transition of data centers, we have stepped up Research and Development (R&D) and application of energy-saving technologies such as energy consumption monitoring and management system, spray liquid cooling system, fluorine pump free-cooling technology, Artificial Intelligence (AI) energy-saving optimization technology, and magnetic levitation refrigeration technology, so as to build near-zero energy consumption data centers. In addition, we are actively developing and utilizing renewable energy sources, exploring green power direct procurement and Renewable Energy Certificate (REC) trading options, and increasing the proportion of renewable energy usage. In addition, we will gradually strengthen greenhouse gas (GHG) management in our supply chain and work with suppliers of Information Technology (IT) equipment and infrastructure to reduce GHG emissions.

The Company will gradually establish systematic processes to assess the significant impact of transition risks on the business and finances based on scenario analysis, and formulate countermeasures to address climate-related transition risks that may exist during the site selection, design, construction and operation phases.

The Company strictly complies with national and local regulatory requirements for the prevention and control of light pollution. From data center site planning and building design to the selection, installation, and maintenance of lighting systems, we take comprehensive measures to strictly control and strive to avoid causing light pollution to the surrounding environment. At the same time, the Company conducts environmental protection publicity, education, and technical training for all employees to increase environmental protection efforts and raise environmental protection awareness among all employees.

We rationally optimize the lighting layout of the site where the data center is located, strictly control the number of landscape lighting, and choose energy-efficient and low-glare LED lights to avoid excessive illumination and light spillover, reducing the discomfort impact on human eyes and animals. We also actively explore the application of new intelligent lighting technologies. Through programmable timing control, intelligent dimming, human sensing, etc., we precisely match lighting needs to further reduce unnecessary light pollution while ensuring lighting quality and security requirements.

The Company strictly follows national and local noise control standards, systematically identifies and classifies various noise sources in data centers, such as IT equipment, air conditioning systems, cooling towers, diesel generators, etc., and adopts technical measures such as sound absorption, sound insulation, noise reduction, and vibration reduction to mitigate the impact of noise on the surrounding acoustic environment. At the same time, the Company conducts environmental protection publicity, education and technical training for all employees, increases environmental protection efforts, and raises the environmental protection awareness of all employees.

We rationally optimize the layout of equipment in the data center, placing high-noise equipment in areas far from sensitive buildings and adopting appropriate noise reduction measures. Meanwhile, we further reduce the noise of fans and cooling towers by selecting low-noise equipment, optimizing ductwork layout, and installing silencers. For instantaneous high-noise sources such as standby generators, we ensure that they are equipped with high-performance silencers and arrange testing times reasonably. We also conduct regular noise monitoring of the site boundary and surrounding sensitive points to ensure compliance, while actively responding to any potential complaints from surrounding residents and promptly optimizing noise reduction solutions.

The Company strictly abides by the laws and regulations related to hazardous chemicals, establishes a comprehensive life cycle management system for hazardous chemicals, and implements hierarchical classification and closed-loop management in the whole process from source procurement to storage, use and disposal. At the same time, the Company conducts environmental protection publicity, education, and technical training for all employees to increase environmental protection efforts and raise environmental protection awareness.

We maintain a hazardous substances register that records detailed information such as the type, quantity, characteristics, and flow of chemicals, and regularly conduct inventory checks to ensure consistency between records and actual stock. We strictly control the procurement process, prioritizing the use of low-toxicity and low-hazard raw materials to reduce the use of hazardous chemicals. For the hazardous substances that must be used, we provide comprehensive safety facilities, set up independent storage spaces with warning signs, and regularly inspect the temperature, humidity and ventilation conditions of the area. We have developed emergency response plans (ERPs) for hazardous chemical leaks, equipped with appropriate emergency rescue and personal protection equipment (PPE), and conduct emergency drills on a regular basis to strengthen the safety awareness of our employees.

The Company strictly complies with the relevant laws, regulations and standards on air pollution and adopts various measures to minimize air pollutant emissions during the operation of the data center to ensure compliance. We regularly conduct air quality monitoring and promptly rectify non-compliant emissions (if any) to ensure compliance. At the same time, the Company conducts environmental protection publicity, education, and technical training for all employees to increase environmental protection efforts and raise environmental protection awareness.

The Company believes that circular economy is of great significance for the Company to realize sustainable development. The Company is committed to realizing the fine management of waste on the basis of compliant storage and disposal, and achieving the recycling of resources through reduction, harmlessness, and resource utilization. We will optimize the efficiency of material usage throughout the life cycle of data centers to achieve waste reduction at the source.

The Company defines waste management priorities as: 1) waste avoidance and reduction; 2) reuse; 3) recycling; and 4) treatment and disposal. Fine management is realized through the whole process control from waste generation, classification, storage, transportation to final disposal. For hazardous waste, the Company entrusts qualified hazardous waste disposal contractors to carry out safe disposal, and establishes a hazardous waste transfer manifest system to prevent secondary pollution. In addition, the Company will also work with employees, suppliers, supply chain, contractors, customers, users and other stakeholders to explore the possibilities of waste reduction.

The Company is acutely aware that the impact of human activities on climate change is a recognized fact. In order to fulfill our corporate social responsibility, mitigate potential climate-related risks caused by our operations, and protect the rights of our business, supply chain, customers and other stakeholders, we support the goals of the Paris Agreement and seek to reduce carbon emissions and build resilience to climate change. Since 2021, the Company has accounted for Scope 1 and Scope 2 GHG emissions at least quarterly and has set targets to achieve carbon neutrality for Scope 1 and Scope 2 emissions by 2030 and net zero emissions by 2040. The Company is committed to reporting on its progress towards achieving its carbon reduction targets at least annually, enhancing the project's ability to maximize positive impacts and transparency.

To mitigate the impact of climate-related risks on the Company, the Company continuously explores ways to manage GHG emissions and the development, procurement and use of renewable energy. The Company adopts industry best practices to improve the energy efficiency of its operations and guides employees, suppliers and customers to minimize their GHG footprints and encourage the use of low-carbon, energy-efficient equipment and materials in their daily operations activities.

The Company recognizes that climate change is one of the greatest challenges faced by society today, and potentially one of the greatest risks to the future of our business. The Company believes that addressing climate change is a matter of urgency, and to this end, the Company has set an ambitious net-zero target to ensure that we can reduce our Scope 1 and 2 greenhouse gas (GHG) emissions by 97% by 2030 compared to the 2021 baseline, and that we will reach our reach net-zero for our Scope 1 and 2 emissions by 2040 through the gradual development of actionable climate plans and our regular monitoring of the target progress.

The Company has taken measures such as energy-conservation technology renovation and clean energy substitution to significantly reduce fossil fuel consumption and scope 1 direct emissions. Simultaneously, the Company vigorously develops renewable energy sources and utilizes clean electricity such as photovoltaic (PV) power generation to reduce Scope 2 indirect emissions resulting from purchased non-renewable electricity. The Company continues to optimize its cooling system and uses high-efficiency refrigerants to reduce the greenhouse effect caused by refrigerant fugitive emissions. In addition, the Company promotes green procurement, utilizes energy-saving and environmentally friendly products, and actively reduces carbon emissions from the supply chain. We will also proactively explore the possibility of participating in national and local carbon trading markets and developing forest carbon sinks, and endeavor to provide customers with comprehensive GHG emission reduction solutions to help decarbonize the industry value chain.

The Company recognizes that water is a precious natural resource, closely relevant to the communities, ecosystems, and economies where the Company's construction and operation sites are located. The Company is committed to water resource management, improving water use efficiency, and eliminating water pollution. Specifically, the Company strives to achieve the following principles, while also considering factors such as businesses at different stages of development, capabilities, resource allocation, applicable technological solutions, and relevant public policies in place:

* Comply with applicable legal and compliance requirements regarding water withdrawal and discharge;

* Integrate global best practices into direct business operations and value chains with reference to international standards and initiatives such as the Sustainable Development Goals (SDGs);

* Assess and manage water resource risks and identify opportunities in direct business operations and value chains;

* Support the upgrading of water-saving technologies to improve the efficiency of process water use to reduce dependence on water resources; and

* Collaborate with stakeholders in the value chain on water conservation and emission reduction.

We attach great importance to the sustainable use of water resource and take measures to maximize water conservation and improve water use efficiency in every aspect of data center site selection, design, construction, and operation. The water used for the operation of our data centers comes from the municipal water supply, which does not involve other water sources such as groundwater and surface water, and will not have any impact on local sensitive water bodies. We strictly comply with national and local wastewater discharge standards and regularly conduct wastewater monitoring to ensure that all water pollutants are discharged in compliance with relevant standards stably.

The Company strictly complies with the relevant laws and regulations on the prevention and control of soil and groundwater contamination, and has taken a series of measures to strengthen the investigation of potential pollution hazards as well as risk management and control.

During the site selection phase, we conduct preliminary groundwater surveys through the workflow of environmental impact assessment (EIA) to understand the fundamental environmental conditions of the project site. We ensure the reasonable layout of production units and facilities that are prone to soil and groundwater contamination, and take necessary measures to effectively prevent leakage risks. For key areas such as the diesel generator rooms, we have taken key measures to prevent leakage, while ensuring that temporary storage rooms for hazardous chemicals and hazardous wastes are built and managed in accordance with relevant requirements. We will also conduct soil and groundwater monitoring as appropriate to keep abreast of changing trends. If exceedances of soil and groundwater standards are detected, we will promptly investigate the traceability of the contamination and take risk control and remediation measures to minimize the impact of our operations on the regional soil and groundwater environment.

The Company believes that circular economy is essential for realizing sustainable development. The Company has established a responsible materials procurement management system, incorporating requirements such as environmental friendliness, low carbon and recyclability into the supplier evaluation and onboarding criteria, while paying attention to the ESG performance of upstream players in the supply chain. We actively use green building materials, prioritize the procurement of localized, renewable and recyclable building materials, reduce GHG emissions during materials transportation, and actively procure energy-saving and environmentally friendly products with environmental label and energy efficiency label certifications. At the same time, we minimize the generation of waste electrical and electronic equipment (WEEE) by procuring modular and standardized products, which improves IT equipment compatibility and material utilization efficiency. In addition, we vigorously develop prefabricated buildings to improve construction efficiency while reducing material waste through off-site factory production and on-site assembly. In product and building design, we actively promote material reduction design, minimizing material consumption by optimizing product dimensions and material usage while ensuring functionality. The Company will be committed to achieving fine management of waste through reduction, harmlessness, and resource utilization, based on compliant storage and disposal of waste, so as to realize resource recycling and maximize the resource utilization efficiency.

The Company strictly complies with the requirements of national policies, laws and regulations, and integrates biodiversity and habitat protection into the full life cycle management of data center site selection, construction and operation.

At the site selection stage, we strictly follow the environmental impact assessment (EIA) process and prudently assess the site selection, avoiding ecologically sensitive areas such as nature reserves and wetland parks, and minimizing the impact on and interference with the original habitats of species. During the construction period, we strictly control the construction behavior to minimize the impact of construction activities on local plants and animals. Lighting equipment is used reasonably during nighttime construction to avoid excessive light pollution. When conditions permit, we take local natural conditions into full consideration in the green design of the site where the Company's data center building is located, giving priority to the use of native species to provide a good habitat for birds, insects and other species. During the operation period, we maintain ecological management and regularly monitor the changes in the biodiversity of the site and its surrounding areas, and take timely and targeted conservation measures (if necessary). We have also strengthened environmental education for all employees to raise their awareness of biodiversity conservation. In the future, we will further improve our supply chain management and work with our upstream and downstream partners to build a biodiversity-friendly value chain.

The Company actively practices the concept of green building and pays great attention to the National Green Data Center certification and international green building rating systems such as LEED, WELL, BEAM Plus, etc., and takes this as a guideline for integrating the requirements of energy saving, water saving, material saving and indoor environmental quality improvement into the full life cycle management of the planning, construction, operation and maintenance, and renovation of data centers. By the end of 2023, the Company has cumulatively had three projects certified as the National Green Data Centers.

In the planning and design stage of the data center, we scientifically select the site layout, fully consider the natural conditions of the site, and maximize the use of natural lighting, natural ventilation, natural cooling, etc., so as to reduce building energy consumption from the source. At the same time, we strictly follow green building standards, optimize building layout, simulate and analyze building energy consumption, and reasonably determine green design parameters. During the construction stage of the data center, we actively promote green procurement and localized procurement, and through modular design, factory prefabrication and on-site assembly, we improve construction efficiency while reducing construction waste. In the operation stage of the data center, we actively innovate and apply energy-saving technologies to improve energy utilization efficiency, reduce data center PUE, and reduce GHG emissions. In addition, we introduce the AI energy optimization system to optimize the equipment operation strategies, regularly conduct energy audits, and formulate targeted energy-saving and emission-reduction measures to comprehensively improve green operation level of data centers.

For the existing data centers, we will continue to explore the possibility of low-carbon transformation, such as upgrading the energy systems of the data center heating, ventilation, and air conditioning (HVAC), power supply and distribution, lighting, etc., to enhance the efficiency of energy utilization. During the upgrading process, we will also adhere to the green building concept to minimize our impact on the environment and demonstrate our commitment to sustainable development.