Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Reduced shareholder communication print production; less than 3% of shareholders requested hard copy Annual Report, over 36% received communications electronically, resulting in reduced energy and water resources associated with paper production.

Social Achievements

• Contributions to education; steps taken to minimize environmental impact; support for local communities; support for communities in developing countries through Catalyst Program; ongoing inclusion (since March 2008) in the FTSE4Good Index Series.

Governance Achievements

• Continued to review and improve compliance with ASX Corporate Governance Council Corporate Governance Principles and Recommendations; implemented change in a prudent manner; adopted practices and policies designed to ensure ethical, responsible, and high-integrity operations; implemented global policies (Anti-bribery and Corruption Policy, Diversity Policy, Labour Standards and Human Rights Policy, Workplace Health and Safety Policy, Supplier Code of Conduct, Privacy Policy, Taxation Governance Statement, Environmental Policy).

Climate Goals & Targets

Environmental Challenges

• Currency exchange rate translation risk impacting AUD reported earnings; fee pressures from healthcare funders; changes in regulation impacting costs or revenue; risk that acquisitions or contracts may not achieve expected financial performance; heightened competition; risk of IT system disruptions; risk of rising interest rates; potential exposure to changes in taxation legislation.

Mitigation Strategies

• Uses ‘natural’ hedging for currency translation risk; geographic and line of business diversification; seeking diversified revenue sources; efficient operations; market leadership positions to shape healthcare systems; active roles in industry associations; thorough due diligence and warranties in acquisition and contract documentation; swift reaction to perceived threats; sophisticated Treasury Policy; strong relationships with banks.

Supply Chain Management

Responsible Procurement

• Supplier Code of Conduct

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: ASX Corporate Governance Council Corporate Governance Principles and Recommendations

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Energy consumption decreased by 0.4% in FY2018.
• Significant decrease in film usage over the past five years.
• Exceeded previous film reduction targets and will continue to target a further 10% reduction of film use over the next two years.
• More than 97% of Sonic shareholders now opt to receive an electronic version of the Annual Report.
• Relocation of several laboratories into purpose-built or refurbished premises with environmental efficiency as a cornerstone.

Social Achievements

• Launched the Catalyst Program, establishing self-sustaining pathology and radiology services for communities in dire need.
• Donated more than $2.3 million in cash and in-kind donations in FY2018.
• Partnered with Clontarf Foundation to provide medical assessments to Aboriginal and Torres Strait Islander boys.
• Opened the Kivulini Maternity Centre in Arusha, Tanzania.
• Provided medical imaging services for the XXI Commonwealth Games.

Governance Achievements

• Maintained all quality accreditations and resolved all findings from internal and external audits.
• Paid $274 million in taxes and remitted a further $444 million to tax authorities on behalf of employees in FY2018.
• Implemented a Supplier Policy requiring ethical and sustainable business practices from suppliers.
• Adheres to a zero-tolerance approach to bribery and corruption.

Climate Goals & Targets

Environmental Challenges

• Minimising environmental footprint and exploring opportunities for long-term environmental benefits.
• Addressing low participation rates in bowel cancer screening programs.

Mitigation Strategies

• Implementing energy efficiency initiatives, including renewable energy systems and low environmental impact vehicles.
• Providing education and training for staff on environmental practices.
• Partnering with suppliers to reduce packaging and transport emissions.
• Using digital solutions to minimise resource waste.
• Creating innovative awareness campaigns (e.g., using the MONA 'poo machine') to increase participation in bowel cancer screening.

Supply Chain Management

Responsible Procurement

• Sonic Supplier Policy requiring ethical and sustainable business practices.

Climate-Related Risks & Opportunities

Environmental Metrics

ESG Focus Areas

• People
• Communities
• Environment
• Governance

Environmental Achievements

• 2.5% reduction in carbon emissions (Australia only)
• 34.6% electric or hybrid motor vehicles in the fleet
• 697 kW installed solar panel capacity
• More than 20,000 LED light fittings installed in Australia, resulting in an estimated energy saving of approximately 4,200,000 kW/h, and a CO2 emissions reduction of approximately 3,400 tonnes per annum.

Social Achievements

• Launched telehealth solutions to provide primary care during COVID-19 lockdowns
• Provided COVID-19 testing to millions globally
• Supported aged care facilities during COVID-19
• Partnered with Clontarf Foundation to improve health outcomes for Indigenous Australians
• Provided employment opportunities for people with disabilities through The Bridge

Governance Achievements

• Updated Code of Conduct, Supplier Policy, Labour Standards and Human Rights Policy, Global Whistleblower Policy and Board Charter to align with UK and Australian modern slavery legislation
• Maintained accreditation and certification with no major adverse findings across more than 1,200 formal quality accreditations and certification audits

Climate Goals & Targets

Environmental Challenges

• COVID-19 pandemic impacting operations and revenue
• Bushfires in Australia impacting staff and operations
• Supply chain disruptions due to COVID-19
• Need to increase recycling rates and reduce waste

Mitigation Strategies

• Temporary pay cuts for senior executives and staff taking leave to mitigate financial impact of COVID-19
• Rapid development and implementation of in-house COVID-19 tests
• Procurement of PPE and other vital supplies
• Direct support to affected staff and communities during bushfires
• Waste process review across Australian facilities to increase recycling rates

Supply Chain Management

Responsible Procurement

• Ethical and sustainable procurement practices
• Supplier Policy requiring compliance with laws, ethical conduct, and environmental sustainability

Climate-Related Risks & Opportunities

Physical Risks

• Bushfires
• Floods

Reporting Standards

Frameworks Used: UN Sustainable Development Goals (SDGs)

Certifications: ISO 15189

UN Sustainable Development Goals

• Goal 3: Good Health and Well-being
• Goal 4: Quality Education
• Goal 5: Gender Equality
• Goal 8: Decent Work and Economic Growth
• Goal 9: Industry, Innovation and Infrastructure
• Goal 10: Reduced Inequalities
• Goal 11: Sustainable Cities and Communities
• Goal 12: Responsible Consumption and Production
• Goal 13: Climate Action

Sonic Healthcare's operations and initiatives contribute to these goals through various programs and practices detailed in the report.

Awards & Recognition

• FTSE4Good Australia 30 Index inclusion

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• 10.5% carbon emission reduction per patient (Australia and UK only)
• 9.6% decrease in energy consumption per patient (Australia)
• 17.3% decrease in energy consumption per patient (UK)
• Medisupport (Switzerland) achieved ISO 14064 certification and committed to carbon neutrality within two years
• Installation of 8,000 additional LEDs in Australia, saving 1,500 t CO2 emissions per annum
• Additional 213 kW solar capacity installed in Australia, saving 587 t CO2 emissions annually
• Increased Sonic’s global hybrid/electric fleet by 57%

Social Achievements

• Launched various initiatives to support employee mental health and wellbeing during the COVID-19 pandemic
• Hunter Imaging Group recognized as ASA Employer of the Year 2021 for commitment to recruiting and training sonographers and flexible employment initiatives
• 84.1% of staff taking parental leave returned to work
• More than 77,000 training courses or modules undertaken globally by Sonic employees
• Significant community investment through Catalyst Program and other initiatives (e.g., $5.4M in donations and sponsorships)

Governance Achievements

• Established a Sustainability Steering Committee reporting to the Sonic Healthcare Board
• Compliance with ASX Corporate Governance Council Corporate Governance Principles and Recommendations
• 2,461 formal external accreditation and certification audits conducted with no major adverse findings

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions due to COVID-19
• Increased testing volumes due to COVID-19 impacting energy consumption
• COVID-19 restrictions delaying some sustainability initiatives

Mitigation Strategies

• Diversified procurement supply chain to ensure continuity of products
• Implemented energy-saving initiatives to offset increased testing volumes
• Flexible approach to implementing sustainability plans to account for COVID-19 restrictions

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Supplier Policy requiring ethical and sustainable practices, including managing and reducing environmental impact
• Formal assessment of suppliers’ environmental policies and credentials
• Site visits and inspection audits of suppliers

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: UN Sustainable Development Goals (SDGs), Australian National Greenhouse and Energy Reporting Act 2007, UK Government’s Streamlined Energy and Carbon Reporting (SECR) framework

Certifications: ISO 14064 (Medisupport), ISO 15189 (various laboratories), ISO/IEC 17025 (various laboratories)

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Goal 3: Good Health and Well-being
• Goal 4: Quality Education
• Goal 5: Gender Equality
• Goal 8: Decent Work and Economic Growth
• Goal 9: Industry, Innovation and Infrastructure
• Goal 10: Reduced Inequalities
• Goal 11: Sustainable Cities and Communities
• Goal 12: Responsible Consumption and Production
• Goal 13: Climate Action

The report details how Sonic Healthcare's initiatives contribute to these goals.

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Hunter Imaging Group - ASA Employer of the Year 2021

Environmental Metrics

ESG Focus Areas

• Climate change
• Circular economy and waste
• Employee attraction, engagement and development
• Workforce health, safety and wellbeing
• Service quality and safety
• Access and affordability
• Ethics, integrity and compliance
• Privacy and information security
• Human rights

Environmental Achievements

• 4-5% reduction in global scope 1 and 2 emissions intensity FY2022 vs FY2021
• Scope 1 and 2 emissions baseline established
• Net-zero pathway endorsed by Board
• Contractual sustainability criteria agreed
• Total amount of waste recycled increased by 34%, resulting in approximately 1.1 million kg of waste being diverted from landfill
• Australia will change to specimen bags manufactured from 100% recycled plastic in FY2023

Social Achievements

• 38% female representation at senior executive level
• Sonic LTIFR was 3.3 which was below the ‘blended’ Safe Work Australia rate of 4.0
• 78.5% of staff currently have access to employee assistance or comparable support programs
• 100% of our facilities quality-accredited in FY2022
• More than 380 peer-reviewed academic publications
• Charitable donations comprising cash, in-kind donations and sponsorships of more than $7 million

Governance Achievements

• 2022 Modern Slavery Statement published
• FY2022 NIST audit completed and scores will form the baseline for assessment
• No critical concerns were reported during FY2022

Climate Goals & Targets

Environmental Challenges

• Impacts on physical assets due to climate change
• Operational adjustments required to incorporate low-emission technologies
• Adaptation of services offered in response to emerging environmentally influenced healthcare needs
• Introduction of mandatory reduction targets and/or carbon pricing across our jurisdictions
• Global vehicle supply issues impacting fleet conversion to zero-emission vehicles
• Recent war in Ukraine impacting gas supplies and pricing
• Increased staff turnover due to easing of COVID-19 restrictions and the psychological impact of the pandemic

Mitigation Strategies

• Commitment to reducing global greenhouse gas emissions in line with the Paris Agreement and SBTi guidance
• Conducting climate-based risk and scenario planning
• Switching to certified sources of renewable energy
• Investing in energy efficiency initiatives
• Optimising onsite energy generation and storage
• Accelerating conversion of global fleet to hybrid and zero-emission vehicles
• Reducing, recycling and re-using waste
• Understanding, measuring and managing material scope 3 emissions
• Utilising petrol/electric hybrid technology and courier route optimisation
• Converting some sites from gas to electricity
• Implementing initiatives to address phlebotomist turnover, such as flexible hours, increased work hours, improved remuneration, additional training and support, and enhanced recognition and feedback systems

Supply Chain Management

Supplier Audits: 499 suppliers sent due diligence questionnaires (approximately 47% of total supplier spend), 212 responded and were satisfactorily cleared

Responsible Procurement

• Supplier Policy outlining expectations for environmental sustainability and adherence to relevant environmental laws and regulations
• Inclusion of sustainability criteria in all new contracts by 30 June 2023
• Monitoring adherence through business review meetings

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events impacting facilities, infrastructure and supply chains

Transition Risks

• Regulatory changes, market shifts impacting energy sources and vehicle technology

Opportunities

• Development of energy-efficient products and services

Reporting Standards

Frameworks Used: GRI Standards, SASB Health Care Delivery Disclosure Topics, UN Sustainable Development Goals

Third-party Assurance: None

UN Sustainable Development Goals

• Goal 3
• Goal 4
• Goal 5
• Goal 8
• Goal 9
• Goal 10
• Goal 11
• Goal 12
• Goal 13

Detailed explanations provided in the report's SDG alignment section (pages 90-98)

Sustainable Products & Innovation

• Recycled plastic specimen bags
• Biopolymer products

Awards & Recognition

• AM (Member in the General Division or the Order of Australia) for Professor Prithi Bhathal
• British Empire Medal for Dr Lisa Levett

Environmental Metrics

ESG Focus Areas

• Climate change
• Circular economy and waste
• Employee attraction, engagement and development
• Workforce health, safety and wellbeing
• Service quality and safety
• Access and affordability
• Ethics, integrity and compliance
• Privacy and information security
• Human rights

Environmental Achievements

• 10% reduction in scope 1 & 2 emissions compared with FY2021 base year
• First global scope 3 inventory completed in FY2023
• Sustainability criteria included in all new procurement contracts
• 30% of total electricity purchased in Australia in FY2023 was certificate-supported renewably sourced.
• 100% of electricity in Germany sourced from certified renewable sources from January 1, 2023.

Social Achievements

• 39.5% women in executive senior leadership positions
• 16 hours’ training per employee p.a. estimated for FY2023
• Sonic’s LTIFR was 3.6, which is below the industry benchmark rate of 4.7
• 78.6% of staff currently have access to employee assistance or comparable support programs
• Launched New Graduate Nurse Program across Australia

Governance Achievements

• 2023 Modern Slavery Statement published
• No critical concerns were reported during FY2023

Climate Goals & Targets

Environmental Challenges

• Automotive supply chain issues limited further increase in hybrid/electric vehicles in the fleet.
• Ongoing war in Ukraine impacted gas supplies and pricing.
• Data quality for global waste varied significantly across jurisdictions.
• FY2023’s planned NIST audit was delayed due to a change of external service provider.

Mitigation Strategies

• Negotiated a contract to annually increase the percentage of renewable energy purchased for Australian sites.
• Some sites converted from gas to electricity; further gas use reduction initiatives are being explored.
• Working with waste service providers to obtain specific data on waste quantities, disposal methods and emission factors.
• Scheduled NIST audit for January/February 2024.

Supply Chain Management

Supplier Audits: 40% of suppliers (by spend) completed questionnaires or provided Modern Slavery Statements

Responsible Procurement

• Assessment of supplier’s environmental and social credentials
• Sonic Supplier Policy outlines expectations for environmental sustainability and human rights compliance

Climate-Related Risks & Opportunities

Physical Risks

• Increased severity and/or frequency of extreme weather events
• Higher/lower than average surface temperatures

Transition Risks

• Increased regulations and consumer demand for lower environmental impact products
• Governments introducing Carbon Pricing
• Changes in stakeholder interest in climate action
• Enhanced ESG related regulations

Opportunities

• New products/services arising from transition or physical risk impacts on customers
• Enhancing ESG governance and disclosures
• Strategic position of collection and operational centres
• Low-energy and resilient assets
• Partnerships with shareholders and the community
• Reduction in scope 2 emissions
• Adoption of circular economy principles

Reporting Standards

Frameworks Used: GRI Standards, SASB Health Care Delivery Disclosure Topics, TCFD, UNSDGs

Third-party Assurance: No independent assurance

UN Sustainable Development Goals

• Goal 3
• Goal 4
• Goal 5
• Goal 8
• Goal 9
• Goal 10
• Goal 11
• Goal 12
• Goal 13

See pages 109-117 for details on how initiatives contribute to these goals.

Environmental Metrics

ESG Focus Areas

• Climate change
• Circular economy and waste
• Employee attraction, engagement and development
• Workforce health, safety and wellbeing
• Service quality and safety
• Access and affordability
• Ethics, integrity and compliance
• Privacy and information security
• Human rights

Environmental Achievements

• 26.8% reduction in scope 1 and 2 (market-based) emissions compared with FY2021 base year
• 28.6% hybrid/electric motor vehicles in the fleet
• 40% additional solar power generation capacity added in FY2024
• 17% reduction in total paper usage for FY2024 compared to FY2022
• 60.0% reduction in radiological film usage in Australian Radiology compared to FY2023

Social Achievements

• 40% women in executive senior leadership positions
• 17.2 hours training per employee during FY2024
• 98.8% staff with access to EAP or comparable support program
• Lowest staff turnover rate (15.6%) in the last four years
• Launched new disability support coordination services

Governance Achievements

• Review of Code of Conduct and Ethics conducted
• Improvements recorded across all areas in Cybersecurity Framework Maturity Score (NIST) assessment
• 2024 Modern Slavery Statement published

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions due to the war in Ukraine impacting gas supplies and pricing
• Data limitations in accurately measuring general and recycling waste
• Higher than benchmark Lost Time Injury Frequency Rate (LTIFR)
• Higher than expected employee turnover in the US

Mitigation Strategies

• Converting some sites from gas to electricity; exploring further gas-use-reduction initiatives
• Working with local sustainability teams and waste management providers to improve data collection and waste segregation
• Implementing initiatives to address issues identified in injury statistics and improve safety training
• Piloting a staff engagement survey in the US to inform HR strategy and address turnover issues

Supply Chain Management

Supplier Audits: Annual supplier business meetings and desk-top supplier site audits; in-person site inspection of a Tier 2 supplier of disposable gloves

Responsible Procurement

• Assessment of supplier ESG policies and compliance with human rights laws
• Inclusion of sustainability criteria in all new procurement contracts
• Requesting major suppliers to work towards science-based emissions reduction targets

Climate-Related Risks & Opportunities

Physical Risks

• Increased frequency and severity of extreme weather events
• Higher/lower than average surface temperatures

Transition Risks

• Increased regulation
• Consumer demand for lower environmental impact products
• Government introduction of carbon pricing

Opportunities

• New products/services arising from transitional and physical risks on customers
• Enhancing ESG governance and disclosures
• Strategic position of collection and operational centers
• Low-energy and resilient assets
• Partnerships with shareholders and the community

Reporting Standards

Frameworks Used: GRI Standards, SASB Health Care Delivery Disclosure Topics, TCFD, UNSDGs

Certifications: ISO 15189, ISO 17025, ISO 14001, ISO 9001, ISO 45001, ISO 27001, EMAS, CLIA, CAP

Third-party Assurance: Not independently assured

UN Sustainable Development Goals

• Goal 3
• Goal 4
• Goal 5
• Goal 8
• Goal 9
• Goal 10
• Goal 11
• Goal 12
• Goal 13

Detailed explanation of alignment with SDGs provided in the report's appendices

Environmental Metrics

ESG Focus Areas

• Environmental Sustainability
• Social Responsibility
• Governance
• Human Rights
• Information Security

Climate Goals & Targets

Supply Chain Management

Responsible Procurement

• Environmental Impact Assessment
• Review of Suppliers' ESG Policies
• Compliance with Global Human Rights Laws

Climate-Related Risks & Opportunities