Tuya : 2023 Environmental, Social and Governance Report

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2023 Environmental, Social and Governance (ESG) Report

Contents

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About this Report

About this Report

Digital Intelligence Integration

This report is the second environmental, social and governance report (hereinafter referred to as the "ESG" report) issued by Tuya Inc. and its subsidiaries (hereinafter referred to as the "Company", "Tuya", "Tuya Inc." or "we"), which is aimed at all stakeholders of the Company, and focuses on disclosing Tuya's management, practices and performance in terms of environmental, social and governance aspects.

Unless otherwise stated, the period covered by this report is from January 1, 2023 to December 31, 2023 (the "Reporting Period"), while certain information and activities are prior to that.

and Superior Quality

Reporting Scope and Boundaries

This report defines the scope of organization based on the principle of materiality. Since the proportion of revenue from overseas companies is not material, the environmental data disclosed in this report does not include those of overseas companies. Unless otherwise specified, all substantive contents involved in this report are consistent with the disclosure scope of the Company's annual report.

Basis of Preparation of the Report

This report has been mainly prepared in accordance with the Environmental, Social and Governance Reporting Guide contained in Appendix C2 of the Listing Rules of The Stock Exchange of Hong Kong Limited (hereinafter referred to as the "Hong Kong Stock Exchange"), and relevant provisions based on principles of materiality, quantitative and consistency.

Green Development and Low-carbon Operations

Source of Information and Assurance of Reliability

The information and data disclosed in this report are derived from the Company's statistical data, relevant documents and internal communication files, as well as system records. The Company assures that this report does not contain any false records or misleading statements, and is responsible for the authenticity, accuracy and completeness of the contents.

Confirmation and Approval

Upon confirmation by the management, this report was approved by the Board of Directors (hereinafter referred to as the "Board") on March 11, 2024.

This report has been written in traditional Chinese and English. The electronic version is published on the "HKEX Announcements" section of the Company's official website (ir.tuya.com/financials/HKEX-Fillings/) and the website of the Hong Kong Stock Exchange (www. hkexnews.hk). In case of any inconsistency between the Chinese and English versions of this report, the English version shall prevail.

Contact Information

We attach great importance to the opinions of stakeholders and welcome readers to email us at ir@tuya.com. Your comments will help us further improve this report and enhance our ESG performance.

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2023 Environmental, Social and Governance (ESG) Report

Chairman's Statement

Build a Smart Solution Developer Ecosystem，Enable everything to be Smart

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Chairman's

Statement

2023 is a year of great process for Tuya. As the world's first Inter- net of Things (IoT) cloud development platform, Tuya leverages its significant first-mover advantage in the global IoT PaaS domain to provide high-quality development, deployment, and management services for brands, OEMs, and developers worldwide to commercialize smart devices. We keep practicing our brand mission of "Smart Life, Smart Living - Enabling Everything to be Smart", and our corporate vision of "Building an IoT Developer Ecosystem". In addition, we devote ourselves to promoting the green transition of the supply chain, advancing sustainable devel- opment, and fulfilling the social responsibility.

We continuously improve our ESG governance system. To be spe- cific, we have established a top-down,three-tier ESG governance structure that consists of the Board of Directors, the ESG Management Committee and the ESG Work Implementation Group to perform oversight and management of corporate sustainability, and have developed policies and systems to ensure clear division of duties and powers to ensure efficient and compliant corporate governance. In 2023, focusing on operation compliance, we have established full-process risk management system from risk identification to risk control, and formulated management policies, such as the Tuya Risk Management Policy and the Tuya Internal Audit Policy, thus effectively ensure that the risks in the compa-

ny's operations are controllable. Besides, we continue to promote anti-corruption and clean governance publicity, and integrity and compliance culture development to strengthen the business ethics and compliance awareness of employees.

As a leading global IoT provider, Tuya maintains its strategic positioning amidst booming industry and escalating competition. We dedicate ourselves to delivering excellent products and ser- vices, and empowering the community with scientific and technological strength. In 2023, we scored plentiful achievements in hardware and software innovation. In particular, we developed a series of hardware modules boasting favorable expansibility and high application value, and rolled out an array of intelligent platforms with energy consumption management, strategic analysis, energy conservation and efficiency improvement. Moreover, we continued to refine our software quality assurance system, and managed software development and operation quality from all aspects to offer safe and reliable software products to our cus- tomers.

Emphasizing ecological conservation, Tuya actively undertakes the social responsibility, and pursues green production while maintaining steady development. As a responsible enterprise, we reduce emissions by comply with the Paris Agreement, identify

climate change-related risks by reference to the TCFD (Task Force on Climate-RelatedFinancial Disclosures) Recommendations, and implement countermeasures to meet the climate change challenges proactively. We encourage green and environmentally -friendly practices in energy, resource and waste management, build the Control Procedures for Energy Conservation and Consumption Reduction , and the Waste Management Regulations to facilitate rational energy utilization, control pollutant discharge strictly, and set waste management targets to minimize waste generation. Through various efforts, we integrate green conception into daily life, and help enterprise practice green life.

Recognizing the pivotal role of employees, we improve the human resource management system constantly, and foster a workplace in which employees grow together with the Company. During the reporting period, we continuously promoted training sessions, and organized training system tailored to different levels, posi- tions, and development channels. We also updated 66 courses, and received total 32,146 participants on the online learning plat- form. Additionally, we introduced incentive mechanisms to promote employee development, and offered holiday benefits and team building activities to care about employees well-being. In 2023, we were awarded the "China Human Resource Sirius Award Best Employer Brand for Global Companies". In the future, we will

stay true to our mission, and join hands with our employees to move forward.

Looking ahead, Tuya will proceed along with our original aspirations and honors. We will consolidate and enhance our competencies in 5 directions, including operation compliance, work safety, ecological conservation, people orientation, and public welfare. We will promote the development of, and spread ESG concepts among employees. With an open and neutral IoT ecol- ogy, we will help enterprises and society in digital and intelligent transformation, accelerate upgrade, and pioneer a new path for green development in the IoT sector.

Chairman of Tuya Inc.

Xueji Wang

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2023 Environmental, Social and Governance (ESG) Report

About Tuya

Tuya (NYSE: TUYA, HKEX: 2391) is a leading technology company focused on making life smarter. Tuya offers a cloud platform that connects a range of devices via the IoT. By building interconnectivity standards, Tuya connects the smart needs of brands, OEMs, developers, and retail chains across a broad range of smart devices and industries. Tuya's solutions empower partners and customers by improving the value of their products while making consumers' lives more convenient through the application of technology. Through its growing commercial SaaS business, Tuya offers smart business solutions for a wide range of verticals. As of the end of the reporting period, Tuya IoT Developer Platform

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About Tuya

The Company's Development Milestones

has accumulated about 993,000 registered developers from over 200 countries and regions, and provided development solutions to approximately 2,900 smart product categories, empowering about 6,100 brands customers.

Listing on the New York Stock Exchange

Around 184 million smart devices deployment of IoT PaaS throughout the year, becoming the world's largest IoT PaaS provider

Official launch of the Cube Smart Private Cloud Solution

Listing on the Main Board of the Hong Kong Stock Exchange to complete the dual primary listing

A significant launch of PaaS 2.0, empowering global developers to enhance product competitiveness.

The all-new HEMS, addressing the "last mile" of intelligent energy consumption load.

Our vision

Global IoT Development

Platform

Our mission

Build an IoT Developer Ecosystem, Enable Everything to be Smart

Our values

Customer Success | Purity and Dedicated, Win-win Cooperation | Backward from Goal, Self-driven Growth | Results First

1+ million peak monthly deployments of IoT PaaS

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2023 Environmental, Social and Governance (ESG) Report

The Company's Honors

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About Tuya

202320232023

202220212020

2019

Global Top 25 IoT

Companies List

Forbes

2019

Smart Innovation

Award

AWE 2019

2018

Most Growth-oriented IoT Enterprise Award

China IoT Conference 2018

2017

Smart Home

Innovations

20192019

20182018

20182017

20172017

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2023 Environmental, Social and Governance (ESG) Report

ESG Performance Highlights

Governance Enhancement for

Long-term Development

Established a top-down ESG governance framework of "Board of Directors - ESG Management Committee - ESG Work Implementation Group"

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ESG

Performance

Highlights

Digital Intelligence Integration and

Superior Quality

Business ethics related policies covering 100% of employees, customers, suppliers, partners and other relevant parties

100%

Anti-corruption and compliance training sessions for all employees (including part-time employees and contractors) litigation cases of corruption, bribery, money laundering, monopoly and other violations of business ethics

Product quality and safety certifications

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231 572

0

Successfully passed the annual audit of ISO 9001 certification with the audit result of "Zero Non-comformityItems"

Contribution to Employee Development

A total of employees participated in the employee training

6,500participants

Training coverage rate of

94.4%

Attained the "Best Employer Brand for Global Companies Award"

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2023 Environmental, Social and Governance (ESG) Report

Corporate Governance

Adhering to compliant operation, we have developed a governance framework with clear division of duties, and established effective management procedures to strengthen transparent and effective oversight and management. We have set up a standardized and orderly governance structure composed of the shareholders' general meeting, the Board and its subordinate special committees, and the management, forming a governance mechanism with clear powers and responsibilities, mutual coordination and mutual checks and balances, and ensuring efficient and compliant corporate governance.

As the highest decision-making body of the Company, the Board of Tuya has established the Audit Committee, the Compensation Committee, the Nomination Committee, and the Corporate Governance Committee. In accordance with the respective articles of these committees, the Standards for Business Behaviors and Ethics and other internal documents, these committees oversee the management of affairs of the Company from different perspectives to ensure stable operation of the Company.

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Risk Management

Risk management plays a pivotal role for steady operations. With reference to the Corporate Governance Code of the Hong Kong Stock Exchange, the Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and the Sarbanes-OxleyAct of 2002 ("SOX" Act), we have formulated management policies such as the Tuya Risk Management Policy and the Tuya Internal Audit Policy , and built a well-organized risk management structure.

Board of Directors

Attaching importance to the diversity and professionalism of the Board, we have comprehensively considered multiple aspects of directors such as background, industry experience, gender, age, and language. To present diverse views and horizons in decision -making and strategy design, we have assessed the abilities, skills and experience of directors in their appointment, including board management skills, professional abilities, as well as finance and risk management experience. For example, Mr. Huang Sidney Xuande, an independent non-executive director of the Board, has over 19 years of finance and risk management experience in the technology and internet industry, and has extensive expertise in business operation and risk management.

The current Board members have extensive industry experience, and professional capabilities in information and technology sci- ence, cloud computing and computer application technology, international business and economics, business administration, law, finance, accounting, investment, engineering, physics, histo- ry, and chemistry, etc. As of the end of the reporting period, the Board of Tuya is composed of 8 directors, including 4 independent directors, accounting for 50%, and 1 female director. Besides, we supervise and assess our diversity policy from time to time to maintain its effectiveness.

Govern-

ance level

Corporate Governance Committee

Formulate and evaluate the Company's corporate governance policies, and monitor the Company's compliance with the governance manual and disclosure

Continuously supervise the de- sign, implementation and monitoring of the Company's management on risk management and internal control systems

Audit Committee

Report to the Board of Directors and supervise the effectiveness of management's design, implementation and monitoring of risk

Tuya Inc. Board of Directors

Manage-

ment

Management

Take actions (including risk management and internal controls) to achieve strategic goals

management and internal control systems

For details over meetings of the Board, the shareholders' general meeting, and special committees, please refer to our annual report. The convening and voting procedures of all meetings or resolutions were in compliance with the relevant provisions of the laws and regulations, the Company's articles of association, and the rules of procedure. All voting results were legal and valid, providing a solid foundation for the Company's standardized operation.

First line of defense

Tuya's Risk Management Structure

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2023 Environmental, Social and Governance (ESG) Report

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We have formed a full-process risk management system covering identification, prevention, assessment, response, monitoring and rectification of risks to effectively control risks during the Company's operations. In addition, we have engaged third-party advisors to assist us in continuously improving our risk management, internal control and operational systems to maintain a suitable and effective risk management system.

Business Ethics

Upholding compliant operations, we actively carry out anti-bribery and anti-corruption work and to foster an integrity-emphasized corporate culture. We strictly adhere to the Anti-Money Laundering Law of the People's Republic of China, the Anti-Unfair Competition Law of the People's Republic of China, the Interim Provisions on the Prohibition of Commercial Bribery, and other relevant national laws and regulations, as well as the laws and regulations of the respective operating locations. we have established a well-structured system of business ethics, abode by rules of business ethics, and worked under an effective and transparent corporate governance framework to build the sustainable business landscape.

We have continued to develop more effective regulations and established a system of business ethics consisting of internal policies such as the Employee Business Code of Conduct, the Integrity Management Standards , and the Tuya Anti-briberyand Anti-corruptionCompliance Policy , covering anti-corruption,anti-monopoly,anti-extortion,anti-money laundering, anti-discrimination, conflict of interest and independence, whistle-blowing, insider trading, information protection, and fair trade requirements.

Prioritizing the management of business ethics in corporate governance, the Company has focused its efforts on building an all-rounded,multi-dimensional and anti-corruption management system. We have specified punishments for violation of anti-corruption provisions in the Basic Human Resources Policy of Tuya , to further guide and restrain the behaviors of employees. Besides, we have presented the requirements of business ethics to our suppliers, and asked them to sign the Integrity Commitments. At present, all our core suppliers have signed the commitments.

Training of Business Ethics

Percentage of core suppliers signed the Integrity Commitments

100%

Highlighting integrity culture development, we have promoted anti-corruption and integrity publicity constantly to enhance the business ethics and compliance awareness of employees. We have provided compulsory training courses regarding anti-corruption, compliance and anti-money laundering to all employees, and stipulated anti-corruption and compliance requirements in service contracts signed with part-time employees and contractors to improve the awareness of integrity among all employees. Also, we have provided anti-corruption and compliance training sessions for all directors to raise their professional skills and integrity awareness, and implement integrity and compliance culture. During the reporting period, there were no litigation cases of corruption, bribery, money laundering, monopoly and other violations of business ethics against the Company or its employees.

Whistle-blowing and Investigation

Tuya has formulated smooth whistle-blowing and complaining channels, and taken effective measures to safeguard the rights and interests of whistle-blowers. We have outlined regulations on protection of whistle-blowers, and clarified whistle-blowing and investigation steps and response measures in the Employee Business Code of Conduct and the Basic Human Resources Policy of Tuya . Tuya encourages stakeholders to report major malpractices such as fraud, corruption, and bribery within and beyond the Company. We established the whistle-blowing email integrity@tuyta.com and make it available to the public, allowing easy access to reporting violations and supervising the Company.

Under the stable risk management system, we have identified, assessed and analyzed internal and external risks in strategy, operation, finance, information technology, and compliance. Moreover, we have actively launched internal and external audits in mulitple times and from multiple dimensions to intensify our risk oversight and management.

In 2023, our internal control SOX audit teams carried out procedures to identify risks in 12 processes including corporate level, sales accounts, procurement payment processes, devised internal control procedures for each risk, and verified effectiveness of each procedure. Up to now, there have been no major internal control failures. In addition, we employed third-party accounting firms to audit our annual financial statement and finance-related internal control risks, and propose audit opinions.

Receive reports

The Human Resources Department and the Internal Audit and Internal Control Department are responsible for managing the Tuya whistle-blowing mailbox and responding to the reported matters timely

Investigate

The Internal Audit and Internal Control Department works with the Human Resources Depart- ment, the Legal Department, and the Finance Department, to conduct investigation on the reported matter, and handle the matter according to the investigation result

Record and track

The Internal Audit and Internal Control Department is responsible for recording and tracking the investigation results and subsequent handling plans of all reported mat- ters, and reporting investigation results and handling plans to the management and the Board of the Company timely

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2023 Environmental, Social and Governance (ESG) Report

ESG Governance

Tuya recognizes that a well-established ESG governance system is the internal foundation to fulfill the Company's external environmental and social responsibilities. Tuya regards sustainable development as the top priority in daily operations and strategic planning, the Company has refined ESG top-level design, facilitated communication with stakeholders, and promoted synergetic development of upstream and downstream enterprises in the value chain to discharge the social responsibility.

Statement from the Board

According to the Company's development strategic plan, operational conditions and communication results with stakeholders, the Board of Tuya regularly identifies ESG risks and opportunities, oversees ESG policies, management, performance and goal implementation progress, and reviews and approves ESG information disclosures.

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ESG Management Framework

Tuya has continued to upgrade its top-down ESG management framework and mechanism for better sustainability oversight and management. The Board, as the top ESG decision maker, undertakes the ultimate responsibility for our ESG job. The ESG Management Committee under the Board is responsible for overseeing our ESG efforts, and reviewing our ESG reports.

• Assess, determine and manage ESG risk
• Ensure that the Company has established a suitable and effective ESG management and internal monitoring system
• Review and approve ESG policies and reports

Board of

Directors

• Supervise the Company's ESG matter

ESG Management Committee

• Advise on the Company's ESG strategies, and identify major ESG risks and opportunities
• Approve and review ESG policies
• Review the Company's annual ESG report, and properly disclose ESG risks faced by the Company, measure taken and goal progress
• • Act on daily ESG matter
  • Regularly report to the ESG Management Committee

Daily Work

The Board assumes the ultimate responsibility for ESG management and information disclosure, and participates in advancing ESG work. The ESG Management Committee is responsible for proposing suggestions on ESG strat- egies, and identifying major ESG risks and opportunities. The ESG Work Implementation Group is responsible for implementing daily ESG tasks, coordinating resources among departments, and promoting continuous improvement of ESG performance.

Risk Management

As Tuya emphasizes the possible significant impacts of ESG risks and opportunities, the Board is tasked with overseeing the identification and assessment of ESG risks and opportunities to ensure ESG risks are fully considered, as well as developing response measures and management objectives to put all major sustainable risks under control effectively.

Tracking of ESG

Goals

The Company has set business -related ESG goals. To achieve these goals, the Board regularly review and track goal progress, collect performance data, and make follow-up adjustments timely based on goal progress.

Communication with Stakeholders

Tuya fully considers the concerns of stakeholders. The Board is charged with engaging in the assessment, prioritization and case study of material ESG issues, and devising effective management strategies for material sustainability risks and issues identified to meet the expectations of stakeholders.

ESG Work Implementation Group