Gaming Meets ESG: KingNet Strengthens Governance and Green Energy Adoption

KingNet Network Co., Ltd. (SZ.002517) has released its 2024 Sustainability & ESG Report, marking its third standalone sustainability report and tenth ESG disclosure. Covering the period from 1 January to 31 December 2024, the report is prepared in accordance with Shenzhen Stock Exchange Self-Regulatory Guidelines No. 17 and references the GRI Standards 2021. The report has also undergone third-party assurance by SGS under AA1000AS v3 (Type 2, Moderate Assurance), reinforcing the credibility of disclosed data and management systems.

For a leading listed online game company navigating regulatory scrutiny, technological disruption, and global expansion, the 2024 report provides a structured view of how ESG considerations are increasingly embedded into corporate strategy and risk management.

Key Sustainability Themes and Disclosures

Climate action remains a headline commitment. KingNet has pledged to achieve operational carbon neutrality by 2025 and full value chain carbon neutrality by 2035. In 2024, total Scope 1 and 2 GHG emissions declined 59% year-on-year to 339.67 tCO2e, with emissions intensity falling to 0.07 tCO2e per RMB million revenue. The company purchased 1,100 green electricity certificates, lifting the proportion of green electricity consumption to over 70%. This signals tangible progress toward near-term carbon neutrality goals, particularly for an asset-light, data-centre-reliant business model.

On innovation, R&D investment reached RMB 598 million in 2024, accounting for 11.69% of main business revenue. The company continues to scale its “Xingyi” and “Zhimeng” large AI models to automate game development processes, reducing animation generation time from weeks to seconds and accelerating map production. These disclosures suggest a strategic pivot toward AI-enabled productivity, positioning KingNet to manage development costs and shorten product cycles amid intensifying market competition.

Social performance reflects both user responsibility and community engagement. The company handled 1.67 million customer service interactions in 2024, resolving all complaint cases within defined timelines. On data security, it reported zero data security incidents and achieved 100% employee training coverage on data protection.

KingNet also continues to invest in rural revitalisation and youth protection initiatives. In 2024, it carried out 20 public welfare projects with total social welfare investment of RMB 7.38 million, delivering 1,579 hours of volunteer service. Through its “Games + Public Welfare” model, the company links IP development with educational outreach and intangible cultural heritage preservation, reinforcing the “social function of games” as a material topic.

Governance and Strategic Signals

Governance structures appear increasingly formalised. The Board of Directors and its Strategy and Sustainability Committee oversee ESG matters, while a three-tier sustainability governance structure supports execution. In 2024, the Board consisted of eight directors, with independent directors accounting for 50% of the Board and 100% of the Audit Committee. This enhanced independent representation aligns with evolving domestic governance reforms and may strengthen oversight credibility.

The company maintains 100% compliance training coverage and reported zero corruption-related cases during the reporting period. Additionally, a comprehensive risk management framework—covering content risk, market competition, talent retention, and policy changes—demonstrates structured identification and mitigation of material ESG-related risks.

Capital market engagement also remains active. In 2024, the company organised investor communication activities engaging approximately 2,000 investors, while maintaining an “A” rating in information disclosure assessments. These signals indicate a deliberate alignment between ESG transparency and investor relations strategy.

What This Report Suggests About Future Direction

The 2024 report suggests KingNet is moving beyond compliance-based ESG disclosure toward strategic integration. The articulation of double materiality, the embedding of IFRS S2 climate-related disclosures, and quantified carbon reduction outcomes indicate readiness for stricter sustainability reporting regimes.

The scale-up of AI large models and digital asset platforms such as KingNet Chain signals a direction of travel toward technology-driven differentiation. If effectively managed, these initiatives have the potential to improve operating efficiency, expand monetisation pathways, and enhance international competitiveness.

Meanwhile, continued overseas revenue growth—RMB 375 million in 2024, up 221.48% year-on-year combined with IP-based cultural exports suggests the company is positioning itself as a global distributor of culturally rooted digital content.

Pacifica ESG View

KingNet Network’s 2024 ESG disclosure reflects measurable climate progress, accelerating AI-enabled innovation, and strengthened governance oversight. The integration of sustainability into product development, digital transformation, and rural revitalisation initiatives indicates a maturing ESG strategy. The key indicator to monitor going forward will be how AI productivity gains, overseas expansion, and carbon neutrality commitments translate into long-term resilience and value creation.