Article 1 Purpose

Livzon Pharmaceutical Group Inc. (the “Company”, together with its subsidiaries, collectively referred to as the “Group” or “we”) is committed to the mission of “prioritizing the quality of life of patients”, focusing on providing high-quality products for life and health. Sound environment, occupational health and safety (EHS) management is an essential foundation to achieve this mission.

We adhere to the concept of sustainable development and uphold the EHS values of “Put life first, prioritize safety, follow regulations and laws, protect the environment”, and incorporate EHS considerations into our corporate business strategic decisions. We commit to continuously improving the performance of EHS management, and to setting targets for reducing environmental impacts, occupational health and safety, and taking action to strive towards these targets.

To clarify the overall principles, requirements, and management framework of the Group’s EHS management, the Company has formulated this Environment, Occupational Health and Safety (EHS) Management Policy (the “Policy”) in accordance with the laws and regulations, such as the Environmental Protection Law of the PRC, the Work Safety Law of the PRC, and the Law of the PRC on the Prevention and Control of Occupational Diseases, and relevant internal rules and regulations.

Article 2 Scope of Application

1. The Policy covers all operations of the Group and applies to all employees and contractors of the Group.

2. The Policy covers the Group’s production and operation and commercial facilities, products and services, distribution and logistics, waste management, due diligence, mergers and acquisitions, and other aspects, and applies to the Group’s suppliers, service providers, contractors, and other major business partners.

Article 3 Organizations and Responsibilities

Article 4 Principles

1. Ensure full compliance with all applicable EHS-related laws and regulations, international standards and regulations, voluntary initiatives, and/or collective agreements, including the Environmental Protection Law of the PRC, the Work Safety Law of the PRC, the Law of the PRC on the Prevention and Control of Occupational Diseases, and other EHS-related laws and regulations, as well as local ordinances and regulations in the locations where the Group’s enterprises operate.

2. Commit to continuously improving the performance of the occupational health and safety (OHS) management system, setting quantitative targets of “zero accidents and zero injuries”, defining priorities and action plans for work, and implementing them.

3. Commit to continuously improving environmental performance and setting objectives to reduce environmental impacts; taking improvement actions to minimize the environmental impact of our business, including reducing carbon and waste emissions, increasing energy and water resource utilization, and striving for carbon neutrality.

4. Commit to protecting biodiversity and refraining from engaging in deforestation.

5. Seek input from employees and/or employee representatives in the development of OHS policies and related systems.

6. Provide a healthy and safe working environment for employees, contractors, and other personnel associated with the Group’s business, protecting them from potential health hazards and injuries.

7. Proactively disclose the Group’s EHS management performance on a regular basis and accept oversight from investors and the public.

8. Take measures to raise awareness among employees, contract workers, contractors, suppliers, and other internal and external stakeholders about the Policy, relevant EHS systems of the Group, and their environmental impacts, and require their strict compliance.

9. Provide EHS training and resource support to employees, enabling them to understand the impacts of their work activities on the environment and assisting in improving their EHS performance.

Article 5 Control Measures

 (I) Control Measures for Occupational Health and Safety

1. Establish and improve the work safety responsibility system, clarifying responsibilities of people at all levels and ensuring that they take responsibility for work safety within their scope of responsibility.

2. Establish a dual prevention system of risk control and hazard investigation and management, improve the risk prevention and resolution system, and enhance the level of work safety to ensure work safety.

3. Incorporate OHS risk management and assessment into all business processes, develop effective action plans and priorities, and continuously enhance the Group’s management level for risk response.

4. Response to accidents and emergencies: Develop emergency response plans and mechanisms, and conduct regular training and emergency drills to strengthen the ability to respond to accidents and emergencies, and minimize impacts.

5. Establish and improve the system of responsibility for occupational disease prevention and control, strengthen the management of occupational disease prevention and control, conduct investigations into work-related injuries, health issues, diseases, and accidents, and take relevant measures based on the investigation results to improve the level of occupational disease prevention and control and ensure the physical and mental health of employees.

6. Establish an OHS appraisal mechanism and incorporate OHS management into performance appraisal to continuously improve the Group’s OHS management performance.

7. Hold regular employee representative meetings, encourage all employees to participate in the Group’s OHS management, listen to employee suggestions, continuously improve the Group’s OHS management, and enhance employees’ awareness of autonomous OHS management.

8. Establish and improve the OHS management system and supporting documents, and conduct regular reviews, audits, and internal audits to ensure compliance with the Company’s requirements and relevant laws, regulations, and rules.

9. Conduct regular OHS management training to strengthen the construction of OHS management culture within the Group.

 (II) Control Measures for Environmental Management

1. Set emission reduction targets for pollutants and waste, incorporate them into performance appraisal, and continuously strengthen the Group’s environmental management efforts to reduce emissions of pollutants and waste and minimize negative impacts of production activities on the environment.

2. Set targets for energy and water resource utilization and carbon emission reduction, and incorporate them into performance appraisal. Actively respond to China’s overall goal of peaking carbon dioxide emissions and achieving carbon neutrality; improve energy and water resource utilization efficiency through improvements in equipment, facilities, technology, and production processes; actively increase the proportion of renewable energy use and strengthen the construction and application of clean energy projects such as photovoltaic energy to reduce greenhouse gas emissions and strive for carbon neutrality.

3. Continuously practice green development by controlling at the source, optimizing product structure, and conducting regular reviews of equipment and processes.

4. Actively pursue certification to ISO 14001 for environmental management system, establish and improve the Group’s environmental management system, comply with environmental laws, regulations, and standards in the locations where the Group’s enterprises operate, strictly adhere to relevant requirements for environmental protection, and encourage contractors, suppliers, and other stakeholders of the Group to actively improve and implement effective environmental management systems.

5. Continuously improve environmental management performance by establishing a sound environmental management framework from top to bottom, decomposing tasks, and cascading responsibilities.

6. Conduct internal and external environmental audits covering: legal compliance, waste and pollutant emission reduction, improvement of environmental management systems, energy conservation and consumption reduction, water resource utilization, biodiversity conservation, etc.

7. Promote the Group’s green and sustainable development through collaborations with higher education institutions, research institutions, and other external institutions on environmental protection.

8. Regularly disclose the Group’s environmental management information in accordance with relevant requirements and accept oversight from investors and the public.

9. Provide regular training on ecological environment protection for employees and implement a system of responsibility for ecological environment protection that defines the ecological environment protection responsibilities at all levels of the Group.

10. Organize internal and external stakeholders, including employees, contract workers, suppliers, and contractors, to participate in ecological environment protection activities, continuously enhancing their awareness of environmental protection.

11. Protect biodiversity through key measures, including:

(1) Strictly comply with laws and regulations related to biodiversity conservation.

(2) Assess the dependencies and impacts of business activities on natural resources, continuously reduce adverse impacts of business activities on biodiversity, promote the sustainable use of natural resources, and maintain ecological balance.

(3) Apply a “mitigation hierarchy” approach, namely “avoidance, reduction, restoration, offset”, to work towards “No Net Loss” of biodiversity. Specifically:

      Avoidance: for business activities such as project/plant planning, avoid locations with important biodiversity and environmentally sensitive areas, and consider alternative solutions to avoid loss of local biodiversity, ensuring that the biodiversity of the ecosystem is comparable to that before project/plant construction. 

     Reduction: reduce the negative impacts on biodiversity (including direct, indirect, and cumulative impacts) through eco-friendly technologies and complementary measures.

     Restoration: if negative impacts have occurred, take remedial measures to restore the damage caused.

     Offset: compensate for adverse impacts on biodiversity that cannot be avoided, reduced, or restored, to offset any residual adverse impacts.

(4) Use no animal or plant materials from species listed in the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES) for product production, and verify the raw materials provided by suppliers to ensure that they are not animal or plant materials from species listed in the CITES.

(5) Foster respect for natural resources and raise awareness of biodiversity conservation among employees and suppliers across all our operations, and continuously strengthen internal promotion and training on biodiversity conservation.

12. Our own operations involve no deforestation, and we commit to maintaining zero deforestation in future operations.

13. Incorporate incentives and monitoring measures in the procurement process to prioritize suppliers with strong environmental performance, encouraging supply chain partners to enhance their environmental awareness and performance.

Article 6 Miscellaneous

1. The policy has been reviewed and approved by the ESG Committee. The ESG Committee regularly reports to the Board on the implementation of the Policy and provides recommendations for the Board’s decision-making and oversight.

2. The ESG Committee is fully responsible for the implementation, oversight, and periodic review of the Policy. The ESG Committee is responsible for the interpretation and revision of the Policy.

3. For matters not covered in the Policy, relevant laws, regulations, and normative documents shall apply.

4. The Policy shall come into effect from the date of issuance.

Livzon Pharmaceutical Group Inc.