Climate Change Data

Environmental Metrics

ESG Focus Areas

• Social Responsibility
• Environmental Protection

Environmental Achievements

• Implemented various measures to reduce and avoid environmental burdens at optimal media production, including waste avoidance, recycling, and using certified disposal companies.
• Invested in recycling measures, such as closed-loop cooling water systems at optimal media production.

Social Achievements

• Maintained a low employee turnover rate compared to the industry.
• Avoided extensive staff layoffs during restructuring and market crisis.
• Consistently high training quota, above industry average.
• Largest employer in Hamburg's music industry.
• One of the largest employers in Mecklenburg-Vorpommern.
• Offered flexible working time models to facilitate work-life balance.
• Regular medical workplace examinations and health measures.
• Created a health-promoting work environment (non-smoking offices, ergonomic furniture, healthy canteen food, company sports).
• Supported social and charitable institutions with cash and in-kind donations.
• Initiated or supported benefit projects through CD sales (e.g., José Carreras' leukemia foundation, tsunami victims).

Governance Achievements

• Member of IFPI and Impala, actively participating in industry associations.
• CEO Michael Haentjes elected chairman of German Phonographic Associations.
• Complied with the recommendations of the German Corporate Governance Code with some exceptions, which are explained in detail in the report.

Climate Goals & Targets

Environmental Challenges

• Difficult market conditions in the music industry.
• Economic consequences of piracy.
• Market crisis in the recorded music industry.

Mitigation Strategies

• Risk-optimized strategy for content marketing.
• Continuous optimization of internal processes and structures.
• Expansion and optimization of service portfolio.
• Risk-optimized expansion of artist and product portfolio.
• Development of new business models and value chain stages.
• Implementation of Vendor Managed Inventory (VMI) system.

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: German Accounting Standards (HGB), German Corporate Governance Code

Third-party Assurance: KPMG Deutsche Treuhand-Gesellschaft Aktiengesellschaft Wirtschaftsprüfungsgesellschaft

Sustainable Products & Innovation

• earBOOKS

Environmental Metrics

Climate Goals & Targets

Supply Chain Management

Climate-Related Risks & Opportunities

Environmental Metrics

ESG Focus Areas

• Employee well-being
• Sustainability
• Circular Economy
• Energy Management
• Work Safety

Environmental Achievements

• Reduced energy costs significantly in optimal media GmbH
• Uses FSC-certified paper suppliers
• Uses "Re-Vinyl" from recycled PVC
• Introduced "Bio-Vinyl" with partially fossil-free raw materials
• ISCC PLUS certification for sustainable supply chains

Social Achievements

• Offered various employee benefits (discounted access to sports facilities, subsidized healthy food, flexible work models, Holiday+ program, subsidized public transport card, discounted Edel products, monthly after-work events)
• Average of 45 employees completed training (prior year: 37)
• Operational health management and commitment to high occupational safety standards in optimal media GmbH

Governance Achievements

• Implementation of ESG criteria (progress reported, full analysis planned for next year)
• Regular updates to the risk management handbook
• Voluntary commitment to ESG reporting in the management report starting next year

Climate Goals & Targets

Environmental Challenges

• Slight decrease in overall revenue due to decreased manufacturing of media carriers, high inflation, consumer restraint, and intensified competition in the vinyl business
• Supply chain disruptions and geopolitical risks
• Internet piracy and copyright infringement
• Risks related to AI and data acquisition for model training
• Cybersecurity and cybercrime risks
• Regulatory risks and compliance (data protection, capital market regulations, ESG regulations like LkSG and CSRD)

Mitigation Strategies

• Thorough cost control and improved material and energy cost ratios
• Active inventory management and write-downs on physical inventory
• Diversification into related areas (books) and acquisition of customers in alternative sales markets
• Continuous optimization of contract relationships with suppliers and customers
• Continuous investment in IT infrastructure, redundancies in critical systems, and targeted training of IT personnel
• Employee training in identifying cyberattacks, penetration tests by external experts
• Continuous employee training and external support to ensure compliance with regulations
• Establishment of a task force to address new ESG regulations, planned comprehensive materiality analysis according to CSRD requirements

Supply Chain Management

Responsible Procurement

• FSC-certified paper suppliers
• ISCC PLUS certification for sustainable supply chains

Climate-Related Risks & Opportunities

Sustainable Products & Innovation

• Re-Vinyl from recycled PVC
• Bio-Vinyl with partially fossil-free raw materials