Climate Change Data

Environmental Metrics

ESG Focus Areas

• Access to hearing care
• Customer-focused solutions
• Investment in people
• Safeguarding the environment

Environmental Achievements

• Not disclosed

Social Achievements

• Not disclosed

Governance Achievements

• Not disclosed

Climate Goals & Targets

Environmental Challenges

• Affordable hearing care remains a challenge in emerging countries and for underprivileged groups.
• Changes in governmental reimbursement and subsidy regimes affect hearing aid sales.
• Many countries lack trained health personnel and infrastructure to address hearing loss.
• Rapidly growing number of people with hearing loss in China potentially exceeding the number of qualified professionals.

Mitigation Strategies

• Dedicated products for China.
• Cooperation with distribution partners and government.
• Education for hearing care professionals.
• Wide range of initiatives including new service formats, distribution channels, and support for local specialists education.

Supply Chain Management

Supplier Audits: Regular audits and visits

Responsible Procurement

• Sonova’s Group Supplier Principles (SGSP), based on international standards, customer requirements, and industry characteristics.

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: GRI

Certifications: ISO 14001

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Diversity
• Employee Engagement
• Environmental Sustainability

Environmental Achievements

• Inclusion in the Dow Jones Sustainability and FTSE4Good Global indices for 2018
• Commitment to eco-efficient practices across all activities

Social Achievements

• First-time selection to the Bloomberg Gender-Equality Index
• Hear the World Foundation supported 23 projects, including hearing assessments for over 20,000 children in Peru
• HearMe global employee survey with 90% participation, leading to initiatives to boost collaboration and employee engagement

Governance Achievements

• Conformance with relevant standards and practices, including the Swiss Code of Obligations, SIX Swiss Exchange Directive, and Swiss Code of Best Practice for Corporate Governance
• Transparent compensation report
• Share buyback program of up to CHF 1.5 billion

Climate Goals & Targets

Environmental Challenges

• Challenges faced in individual markets such as the US and Netherlands (addressed through store network streamlining and reconfiguration)
• Adverse currency developments impacting EBITA and EPS

Mitigation Strategies

• Streamlined and reconfigured store network in the US with a bigger focus on the Sun Belt
• Optimized store network and introduced a new flagship store concept in the Netherlands
• Steps to further improve local operating structure in the UK, Germany, and Canada, streamlining the supply chain

Supply Chain Management

Responsible Procurement

• Group Supplier Principles (SGSP) requiring suppliers to follow all applicable laws and regulations, ensure a healthy and safe working environment and are prohibited from using child labor

Climate-Related Risks & Opportunities

Environmental Metrics

ESG Focus Areas

• Climate change
• Social impact
• Governance

Environmental Achievements

• Reduced carbon emissions intensity by 11% compared to the prior year
• Reduced the carbon footprint per shipped hearing aid pair by 40% with a new slim packaging solution

Social Achievements

• Hear the World Foundation trained 190 professionals in 24 programs globally and reached 35,000 children in low- and middle-income countries

Governance Achievements

• Nominated Adrian Widmer for election as a new Board member
• Proposed a change in auditor to Ernst & Young AG

Climate Goals & Targets

Environmental Challenges

• Significant drop in revenue due to the COVID-19 pandemic and its impact on the hearing care market
• Reduced operating hours and temporary closures of audiology stores
• Postponement of non-essential surgeries affecting the Cochlear Implants business
• Voluntary field corrective action in February 2020 for HiRes Ultra and Ultra 3D cochlear implants

Mitigation Strategies

• Implemented strict cost-reduction programs (government-subsidized work time reductions, cuts in discretionary spending, robust working capital management, tapping further sources of liquidity)
• Suspended share buyback program and issued a bond
• Proposed a stock dividend
• Voluntary reduction in cash compensation for Board of Directors and Management Board
• Continued R&D investment as planned

Supply Chain Management

Responsible Procurement

• Sonova’s Group Supplier Principles (SGSP)

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: ESG standards, Dow Jones Sustainability Index, FTSE4Good Index, Carbon Disclosure Project (CDP)

Sustainable Products & Innovation

• New slim packaging solution

Environmental Metrics

ESG Focus Areas

• Climate change
• Diversity & Inclusion
• Talent development & employee engagement
• Responsible supply chain management
• Data privacy and digital ethics

Environmental Achievements

• Opening of one of the first zero-energy commercial buildings in Switzerland
• Further reduced carbon footprint

Social Achievements

• At year-end 34% of all upper and senior management positions were held by women
• Accelerated action on diversity and inclusion

Governance Achievements

• Introduced ESG targets as an element of the objectives for the variable cash compensation of the members of our Management Board
• Extending and intensifying our long-established system of ESG risk assessments and audits of our suppliers, and establishing a strong digital ethics and cybersecurity function

Climate Goals & Targets

Environmental Challenges

• COVID-19 pandemic impacting the hearing care market, including restrictions on personal movement, consumer activity, and elective surgery
• Strengthening of the Swiss franc
• Reduced number of elective surgeries due to the pandemic
• Residual impact from voluntary field corrective action on cochlear implants

Mitigation Strategies

• Swift and decisive measures to assure employee and customer health and safety, protect financial flexibility, and contain costs
• Accelerated structural optimization and growth initiatives
• Strong focus on cost reductions
• Program to assure product quality and reliability to regain customer confidence
• Streamlined supply chain and administrative functions
• Intensive Kaizen workshops to improve manufacturing productivity

Supply Chain Management

Responsible Procurement

• ESG risk assessments and audits of suppliers

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: Science Based Targets initiative (SBTi)

Environmental Metrics

ESG Focus Areas

• Protecting the planet
• Serving society
• Advancing our people
• Acting with integrity

Environmental Achievements

• Reduced greenhouse gas emissions by 22% across the value chain since 2019 (including Consumer Hearing business and Alpaca for all years).
• Achieved carbon neutrality in own production facilities.
• 100% of electricity consumption from renewable sources.

Social Achievements

• Maintained consistently high levels of employee engagement (82% employee engagement rate).
• 97% of non-production/assembly employees have a personal development plan.
• Launched a global wellbeing framework and program focusing on mental health.
• Trained and certified 270 hearing care professionals in low- and middle-income countries through the SIHA program (2021/22 and 2022/23).
• Increased the share of women in key positions to 34.5%.

Governance Achievements

• Implemented human rights due diligence framework aligned with international standards.
• Launched a Human Rights Policy.
• Conducted a second human rights risk assessment.
• Launched a tool to assess sustainability risks for suppliers.

Climate Goals & Targets

Environmental Challenges

• Overall absolute weight of packaging increased in 2022/23 due to strong business growth, making it unlikely to reach the target of a 20% reduction in packaging by the end of 2023/24.
• Challenging talent hiring market slowed progress on increasing the share of women in key positions.
• Hearing instrument product reliability rate declined by 2%.

Mitigation Strategies

• Initiated further improvement actions to reduce packaging weight.
• Implementing a new Group-wide job level hierarchy to enable easier global data collection and improve comparability between locations and setting new targets for women in senior and middle management.
• Identified root causes for the decline in hearing instrument reliability and took improvement measures (hardware and software improvements, product design adjustments, manufacturing process refinements, agreements with critical suppliers).

Supply Chain Management

Supplier Audits: 78% of identified potential high ESG risk suppliers assessed in 2022/23 (Hearing Instruments business only); 10 supplier visits for Hearing Instruments, 6 onsite audits for Consumer Hearing.

Responsible Procurement

• Sonova Group Supplier Principles (SGSP), to be replaced by a new Supplier Code of Conduct.
• EcoVadis sustainability assessment for suppliers.
• Engagement with key suppliers on GHG emission reductions.

Climate-Related Risks & Opportunities

Physical Risks

• Heatwaves and extreme temperatures
• Wildfires
• Heavy precipitation & flooding
• Sea level rise and coastal flooding

Transition Risks

• Carbon pricing schemes
• Net zero retrofit requirements
• Scope 3 reductions
• Increase in airfares

Opportunities

• Energy savings due to net zero retrofits
• Electrification of transport sector

Reporting Standards

Frameworks Used: GRI, SASB, TCFD, UNGC

Certifications: ISO 14001, ISO 13485, Fair-ON-Pay (Switzerland)

Third-party Assurance: Ernst & Young Ltd (limited assurance)

UN Sustainable Development Goals

• 3
• 5
• 6
• 7
• 8
• 9
• 10
• 12
• 13
• 16
• 17

Sonova's initiatives contribute to these goals through various programs and actions detailed in the report.

Sustainable Products & Innovation

• Rechargeable batteries for hearing aids.
• Eco-design principles for packaging.

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Climate change
• Diversity and Inclusion
• Talent and engagement
• Sustainable supply chain management
• Data privacy and digital ethics

Environmental Achievements

• 28% reduction in total scope 1-3 CO2 emissions since 2019 on a comparable basis.
• 9.4% reduction in total packaging weight compared to 2022/23.
• Greenhouse gas reduction targets approved by the Science Based Targets initiative (SBTi).

Social Achievements

• Increased share of women in senior management from 22.0% to 28.3% and middle management from 36.4% to 39.9%.
• Around two thirds of leadership positions were hired from within the organization.
• Employee engagement level of 83% in 2023.

Governance Achievements

• Consistently high ESG ratings, including the highest possible MSCI rating of AAA and inclusion in the Dow Jones Sustainability Index for the tenth consecutive year.

Climate Goals & Targets

Environmental Challenges

• Adverse currency exchange-rate developments reduced results reported in Swiss francs.
• In the first half of the financial year, the Hearing Instruments business was affected by the non-renewal of a single major US contract.
• Inconsistent performance from some batteries provided by a deselected external supplier for a key product.

Mitigation Strategies

• Solved temporary operational issues in Hearing Instruments business.
• Launched new Mexicali facility for the Americas, reducing delivery time and costs and optimizing the global supply chain.
• Deselected the external battery supplier and launched a successor product.

Supply Chain Management

Responsible Procurement

• Group Supplier Principles (SGSP)

Climate-Related Risks & Opportunities