Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environment
• Social
• Governance

Environmental Achievements

• Performed first energy audit in 2016 for German operations, identifying areas for improvement in energy use and carbon emissions.
• CGM headquarter in Koblenz built in 2012 according to passive house standard, achieving >80% reduction in heating requirements compared to a comparable new building.

Social Achievements

• Workplace Health Management program ('Be healthy. Feel good') with various initiatives (prevention courses, ergonomic advice, eye examination, etc.).
• Employee participation in Wings for Life World Run.

Governance Achievements

• Changed legal form from German AG to European SE in 2016.
• Maintained a dual board structure with independent outside directors and employee representatives.

Climate Goals & Targets

Environmental Challenges

• Lower than planned revenue from software licenses, hardware sales, and professional services in several markets in the Ambulatory Information Systems segment.
• Lower than expected revenue contribution and higher costs in the Gematik project in Germany.

Mitigation Strategies

• Launched new add-on software modules in Germany to enable doctors to fulfill legal obligations.
• Strong incentives and active campaigns to maximize uptake of new products.
• Continued work on the Gematik project, achieving milestones such as BSI security certificate for Konnektor and approval of card terminals.

Supply Chain Management

Climate-Related Risks & Opportunities

Environmental Metrics

Social Achievements

• Employed 4,572 persons worldwide, a 6% increase from the previous year.
• Operated a daycare center at the Koblenz office campus, caring for up to 43 children.
• Employed 88 trainees in Germany in 2017, with two-thirds receiving job offers after completing their training.

Governance Achievements

• Adopted the specifications of the EU General Data Protection Regulation (GDPR) early and implemented it on time in the organization and all products.
• Published a Corporate Social Responsibility (CSR) report on the company website in compliance with EU Directive 2014/95/EU.

Climate Goals & Targets

Environmental Challenges

• Lower than expected revenue from the rollout of the Telematics Infrastructure in Germany due to delays in product completion, security certification, and accreditation.
• Early cancellation of the ORS-1 project reduced revenue.
• Weak year in the US business.

Mitigation Strategies

• Lowered financial forecast for 2017.
• Successfully ramped up deliveries of Telematics Infrastructure components in December 2017, with installations completed in early 2018.
• Developed a new G3-based software platform for the US market (expected completion in 2018).

Supply Chain Management

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: IFRS

Third-party Assurance: PricewaterhouseCoopers GmbH, Frankfurt (PwC)

Environmental Metrics

Social Achievements

• Increased employee headcount by 7% to 9,229.

Governance Achievements

• Published a Declaration on Corporate Governance available on the company website.

Climate Goals & Targets

Environmental Challenges

• Cyber attack in December 2021.
• War in Ukraine (potential future effects).

Mitigation Strategies

• Resolutely protected systems, employees, and customers; worked with public agencies and external experts to counter the ransomware attack.
• No material direct impact on asset and liability recognition and measurement as of the reporting date; future effects cannot be ruled out.

Supply Chain Management

Climate-Related Risks & Opportunities

Environmental Metrics

Social Achievements

• Hired 52 new trainees and dual-program students in Germany, resulting in 163 trainees and dual-program students under contract at year-end. 75% of German apprentices were retained after graduation in 2023, mostly in IT.

Governance Achievements

• Updated Declaration of Compliance with the German Corporate Governance Code was adopted.

Climate Goals & Targets

Environmental Challenges

• Current figures fell short of management's expectations in 2023, requiring stronger efforts to reach targets.
• Data processing risks (lack of coordination and alignment of IT strategy, insufficient data protection, inadequate documentation).
• Operational risks (product quality, market and customer risks).
• Regulatory risks (legal and political risks, data privacy risks).
• Strategic risks (inadequate strategic decision-making, unforeseeable market developments, poor strategy implementation).
• Project risks (non-compliance with schedules, resource shortages, customer acceptance).
• Personnel risks (concentration of expertise, staff fluctuation, poor working atmosphere).
• Financial risks (liquidity and refinancing risks, currency risks, control risks).
• Macroeconomic and political risks (political changes, macroeconomic developments).
• Other risks (effects from the war in Ukraine, climate change and weather events).
• Tax risks (subsequent tax payments, intercompany pricing, inaccurate tax planning).

Mitigation Strategies

• Implemented a comprehensive planning and performance management system with monthly monitoring of key performance indicators.
• High demands placed on quality management in software development and maintenance; ISO/IEC 27001 certification for information security.
• Strict requirements for selection of sales and service partners; special training provided.
• Regular controls of strategic direction; measures to compensate for impending losses from deviations in project progress.
• Regular consulting with local law firms and tax advisors in international markets; contact with local public authorities.
• Different financing instruments (promissory note, term loan, revolving loan, credit lines) to mitigate liquidity risks.
• Rolling liquidity plan to monitor and manage short-term liquidity risks; 12-month liquidity planning for medium-term risks.
• Interest rate cap and swap to mitigate interest rate risks.
• Dunning system and prepayments for recurring revenue contracts to minimize credit risks.
• Regular monitoring of currency positions and use of derivative financial instruments for hedging.
• Sufficient provisions recognized for general risks arising from ongoing tax audits.

Supply Chain Management

Climate-Related Risks & Opportunities

Awards & Recognition

• Best in KLAS prize awarded by KLAS Research