MSCI Upgrades CMS (00867) ESG Rating to ‘BBB’, Corporate Governance Performance Exceeds its Global Peers

Company News

Recently, the largest index provider, MSCI (Morgan Stanley Capital
International Index) published a report on the ESG (Environmental, Social and Governance)
rating for China Medical System Holdings Limited (“CMS”). With its outstanding
performance in ESG related areas, CMS’s ESG rating has been upgraded to ‘BBB’
from ‘BB’ and falls into a relatively leading range among its domestic peers in
pharmaceutical industry.

According to the report, CMS surpassed the average performance of global
peers in many areas such as corporate governance, product quality and safety,
human resource management and access to health care. CMS performed especially
well in corporate governance, in which MSCI commended, “the Company falls into
the highest scoring range relative to global peers. Governance practices are
generally well aligned with shareholder interests.”

With the increasing concerns from the capital market on responsible
investment, non-financial indicators such as corporate governance,
environmental and social impact of listed companies have been given more and
more attention. As MSCI-ESG rating focuses on substantive issues related to environment,
society, and corporate governance, it has become an important basis of investment
decisions for global well-known investment institutions.

CMS has always adheres to its goal of sustainable development, which is“Carrying out the concept of environmental protection, achieving the value
of social responsibility, being committed to becoming a leading sustainable
pharmaceutical enterprise in China”, and thoroughly implements it to work. The
Group has established the mature ESG governance framework and mechanism,continuously increased the involvement of the Board, set annual targets
and improvement plans, and aligned with a closed-loop process to carry out
various ESG management work. The policies and regulations in corporate
governance, compliance operations, supply chain management, product quality and
safety, human resource management and environmental protection of the Group have
also been gradually improved.

The upgrade of MSCI-ESG rating is inseparable
with CMS’s responsibility to the environment and society, as well as its
long-term focus and resource investment on ESG management and information
disclosure. As a phased achievement of CMS’s ESG management, the higher rating
reflects MSCI’s further recognition and affirmation on Group’s sustainable
development and long-term investment value. In the future, CMS will continue to
actively participate in public welfare, pay attention to the implementation of
corporate social responsibility, and make contributions to the improvement of
ecological environment and the sustainable development of society.