Sungrow continues to accelerate its digital transformation, carrying out digital transformation from four dimensions: business architecture, application architecture, data architecture, and technical architecture. Adhere to the principle of "building a digital and intelligent Sungrow, achieving global leadership", gradually realizing the digitalization and intelligence of enterprises, and supporting the construction of digital factories.

Sungrow maintains a “zero tolerance” attitude towards corruption, and sets up a group-level department, the Audit and Inspection Department, to independently carry out audit and supervision under the guidance of the Chairman of the Board of Directors. The anti-corruption work of the Audit and Inspection Department is reported to the Audit Committee of the Board of Directors on a quarterly basis, ensuring that the company's business operates in compliance, order, and efficiency. The company continues to improve its compliance management system and publicly released the "Compliance Code of Conduct" in 2023. According to the Regulations on the Management of Employee Rewards and Punishments, In the event of a breach of commitment, penalties may include, but are not limited to, termination of the employment contract, surrender of any illegal gains to the company and compensation for the company's losses, cancellation of company-provided stocks or options, and inclusion on the Sungrow Integrity Alliance blacklist.

Taking diversity of the Board of Directors into consideration, Sungrow has continued to enrich the backgrounds of directors in order to improve the competence and the comprehensive governance level of the Board of Directors. Currently, the board consists of 8 directors who bring along profound professional experiences in the industry or extensive exposure in management. Among them, 3 independent directors are experts in legal affairs, finance, and industry respectively, complementary to those with an enterprise background. One director is female, accounting for 12.5% of all the board members.

Sungrow attaches great importance to sustainable development. In 2023, we formulated the Group's sustainable development governance framework, expanded the Strategic Committee to the Strategy and Sustainable Development Committee. Sungrow has incorporated ESG-related performance indicators into the organizational performance indicators of relevant departments, promoted the ESG-related remuneration for management at all levels included the executive layer, implemented ESG management responsibilities, and provided further support for the orderly advancement of the Group's ESG performance.

Sungrow identifies and determines the main risks and their boundaries based on organizational context analysis and stakeholder needs. The types of risks identified by the company include policy risks and environmental management risks. Policy Risks: The renewable energy generation industry is currently supported by government policies. If there are significant changes in the macroeconomic environment or government subsidies and policies, they will impact the Company's development to some extent. Environmental Management Risks: Clients from regions such as the United States and Europe have strict requirements regarding hazardous substances in products. The Company needs to identify client requirements and the relevant laws and regulations concerning hazardous substances in their respective regions to prevent risks associated with non-compliant products, returns, and penalties due to ignorance of client demands and related laws and regulations. Sungrow assesses the severity and frequency of identified risks. The assessment results of risk appetite are categorized into “High”, “Medium”, and “Low” levels based on risk coefficients. According to risk acceptance criteria, the Company determines whether to take countermeasures for each risk. 

The Company develops internal management documents to adequately prepare for policy risks, environmental management risks, compliance risks, information security risks, etc. Sungrow establishes mitigating actions for identified risks, clarifies responsible departments, and determines risk warning indicators to ensure risks are controllable and manageable. The current mitigating actions for addressing policy risks include regularly tracking and analyzing policy changes, and diversifying business models and revenue streams. Mitigating actions for environmental management risks, including obtaining environmental management system certifications and controlling pollutants and hazardous substances. Sungrow establishes a risk exposure monitoring mechanism, regularly updates the Company's Organizational Context Analysis Table and Stakeholder and Their Needs List, at least once a year. The Company conducts comprehensive and dynamic monitoring and management of risks to accurately and timely understand changes in risks. 

Sungrow conducts compliance risk management audits according to the Enterprise Compliance Management Measures and relevant management system standards, with a frequency of at least once a year. The Company regularly conducts or commissions external organizations with professional qualifications to evaluate the effectiveness of the risk management system, focusing on potential risks, deficiencies, omissions, or weak links in the risk management system, and provides a comprehensive and objective assessment of the actual operation of the risk management system.