Safeguarding the environment

Sonova and the United Nations Sustainable Development Goals (SDGs)
Through this CR focus area, Sonova contributes to SDGs 6, 7, 9, 12, and 13. More information is provided in the corresponding section of this CR Report: Sustainable Development Goals.

Our approach

Commitment and policies

Sonova makes an explicit commitment to continuously promote and pursue environmentally friendly practices throughout the whole lifecycle of its products and across all its business activities. We set the priorities and provide the resources needed to reduce our environmental impact through responsible, efficient management of our buildings and infrastructure, processes, products, and services. Our environmental policy supports Sonova’s commitment to behave proactively and describes the company’s environmental management organization and responsibilities.

Environmental management systems

As part of its strategy of continuous operational improvement, Sonova has established ISO 14001-certified environmental management systems at all its key manufacturing and distribution centers; these require employees to make sound environmental decisions when designing, manufacturing, and servicing products. For non-manufacturing sites, Sonova has adapted its environmental management system to ensure integration of environmental factors in decision-making and improvement in environmental performance. All key Sonova manufacturing and distribution centers are currently certified to the ISO 14001 standard:

Environmental goals and targets

Sonova’s environmental program sets clearly defined goals and targets. We continuously monitor progress and optimize environmental performance across the Group. The five most important key environmental targets, current progress, and related UN Sustainable Development Goals (SDGs) are outlined in the table below. All our environmental five-year targets have 2017 as the base year and 2022 as the target year. Most of the programs are on track to reach their targets and necessary measures have been initiated. More details on these are provided in the respective sections below. In the 2019/20 financial year, we raised our level of ambition in the energy and climate target and updated our 2022 target from a 30% to a 50% reduction of carbon emissions intensity compared to 2017.

Sonova 2022 key environmental targets and progress

Environmental legal compliance

Thanks to Sonova’s low risk exposure to environmental issues and its strict group-wide environmental management, no fines or non-monetary sanctions were levied against Sonova in 2019 and in previous years for noncompliance with environmental laws or regulations.

Energy and climate

Commitment and approach

Climate change is one of the biggest challenges of our time: it requires prompt, effective action from governments, industries, and individuals. Sonova acknowledges its responsibility and is committed to reducing its carbon footprint. The company’s strategy requires a steady increase in the energy efficiency of its operations, integrating environmentally friendly energy purchase and generation, and optimizing transportation and distribution logistics. Sonova has set up implementation initiatives that concentrate on our most energy-intensive facilities, while considering other sites that show realistic potential for improvement.

Sonova strives to be trustworthy and transparent with all its stakeholders. We therefore participate in the Carbon Disclosure Project (CDP). The results are publicly available and accessible on the CDP website. The CDP scoring level (Disclosure, Awareness, Management, Leadership) demonstrates a company’s level of environmental stewardship, and actions and approaches in managing climate change. In 2019, Sonova received an A- leadership level ranking for the second year in a row, recognizing our environmental transparency and climate change related actions.

Climate change risks and opportunities

Sonova takes a systematic approach to managing environmental, social and governance (ESG) risks, both in its supply chain and in its own operations. Identifying and mitigating potential risks arising from climate change is an integral part of our strategic risk management process, and it is reviewed and assessed together with all other business risks. From a risk perspective, Sonova’s business has a relatively low exposure to climate change risks and we do currently not anticipate significant financial implications for the organization’s activities from this source.

Climate change risks are not currently included in the Group Risk Map as they do not appear to be key risks, given of the nature of Sonova’s goods and services. The company has not identified significant climate change related regulatory, physical, market, cost, legal, or other risks to its business, including changes in emission limits, energy efficiency standards, carbon taxes, or carbon trading schemes. At the same time, Sonova does not anticipate major current or future climate change related business opportunities. The topic mainly has indirect and limited influence on our business, e.g. in terms of production processes.

Energy

In 2019, the total energy consumption of the Sonova Group from heating (fuel oil, natural gas, district heating), electricity, and vehicle fuels (diesel, gasoline, liquefied petroleum gas, liquefied natural gas, ethanol) amounted to 119,975 megawatt-hours (MWh). Of this total, 57,705 MWh can be attributed to the Wholesale business and 62,270 MWh to the Audiological Care business. The Wholesale business accounts for a higher proportion of electricity consumption because of the air conditioning systems necessary in operation centers in China, Vietnam and the US. On the other hand, the Audiological Care business accounts for a higher proportion of heating because of a stronger presence in Europe, where cold winters make heating more relevant.

Compared to the previous year, total energy consumption stayed almost on the same level with a slight reduction of 0.3% despite higher production volume and growth in employee numbers. This improvement in energy intensity was mainly thanks to a reduction in total fuel consumption of Sonovaʼs corporate car fleet and decreased heating consumption in the Audiological Care business, offsetting an increase in heating for the Wholesale business that was primarily due to temporary adjustments to our HVAC system at our headquarters in Stäfa. Over the past two years, Sonova reduced its total energy consumption by 4.7%.

Energy consumption

Sonova is committed to increasing the share of renewable energy in its total energy budget. In line with our greenhouse gas reduction target, we have set a target of 100% renewable electricity for all key manufacturing and distribution centers by 2022. Across the company, our target is to increase the share of renewable energy to 20% of total energy consumption by 2022. In 2019, 14,331 MWh of electricity came from renewable sources, representing an increase in the renewable energy share of total energy consumption from 9% to 12%, compared to the previous year. In 2019, the 5,000-square meter solar panel system on the roofs of our manufacturing center in Suzhou, China, activated in 2015, generated 427 MWh of renewable electricity.

Renewable energy

Greenhouse gas emissions

Sonova aims to achieve by 2022 a 50% reduction of greenhouse gas (GHG) emissions in relation to revenues compared to the base year of 2017. The GHG total for our target comprises Scope 1, 2, and air-travel related Scope 3 emissions. In 2019, we further reduced GHG emissions intensity by 10.6% from 16.4 to 14.7 metric tons of CO₂ equivalents (t CO₂eq) per million CHF revenues, compared to 2018. This results in a total reduction of GHG emissions intensity by 21.1% compared to 2017 levels, keeping us well on track to achieve our 2022 target.

Sonova Group’s absolute carbon footprint of Scope 1 and 2 emissions for 2019 amounted to 32,119 t CO₂eq, down by 9.5% from the previous year’s emissions of 35,500 t CO₂eq. The main reason for the absolute reduction in Scope 1 and 2 GHG emissions is increased use of renewable electricity in our Wholesale business, as well as group-wide efforts to improve energy efficiency in our infrastructure and production processes. Sonova Group companies developed local carbon footprint reduction measures in line with the global environmental program, to help reach the 2022 environmental targets. Examples include improving building automation and optimizing electricity use for heating, ventilation, and air conditioning at our operation centers in Vietnam and China, electricity use reduction programs covering the data center, manufacturing, and offices at Advanced Bionics headquarters in Valencia, USA, and replacing conventional lighting with LED technology in several Group companies. Energy efficiency and reduction are also taken into account when constructing new buildings. For example, construction of the new headquarters of Phonak Communications in Switzerland started in 2019 and will be completed in 2020. The new building is designed for minimal energy consumption. Solar panels will provide a large part of the required electricity.

Greenhouse gas (GHG) emissions – Scope 1+2

In 2019, we estimated Scope 3 emissions for three categories: upstream transportation and distribution (11,543 t CO₂eq), business travel (10,648 t CO₂eq), and employee commuting (21,558 t CO₂eq), which totals to 43,749 t CO₂eq of Scope 3 emissions.

Greenhouse gas (GHG) emissions – Scope 3

Total Scope 1, 2, and 3 absolute greenhouse gas emissions for 2019 amounted to 75,868 t CO₂eq, a reduction of 3.3% compared to the previous year (78,431 t CO₂eq) and a reduction of 7.8% compared to 2017 (82,243 t CO₂eq). The majority of Sonovaʼs GHG emissions are Scope 3 emissions (58% in 2019).

Business-related air travel

Sonova is a global company: business-related air travel is essential to maintain and improve operations, and to collaborate with internal and external stakeholders. However, we are committed to reduce our carbon emissions from business-related air travel by systematically using information and communications technology to substitute for air travel. In 2019, the carbon emissions from business-related air travel on a group-wide basis were 10,648 t CO₂eq. This represents an emissions increase of 8.3% compared to the previous year (2018: 9,830 t CO₂eq), which is mostly due to an increase in business activities and intensified global collaboration across the Sonova Group in the financial year 2019/20. We will continue our strict enforcement of travel policies and increased use of web-conferencing tools.

Corporate car fleet

Sonova also estimated the carbon footprint of its corporate car fleet in 2019. All vehicles owned or leased by Sonova Group companies were taken into account. The estimated total carbon footprint of Sonova’s corporate car fleet is around 6,259 t CO₂eq in 2019, which represents a reduction of 5.8% compared with 2018 emissions of 6,645 t CO₂eq. This decrease compared to the previous year is mostly due to a reduction in distance driven across the entire Sonova car fleet.

Employee commuting

In 2017, Sonova conducted for the first time a worldwide survey to estimate its carbon footprint from employee commuting; this amounted to 21,558 t CO₂eq. The global survey is not carried out every year. Hence, for 2019, we base our carbon footprint calculations on the numbers from the 2017 survey results. Because the availability of public transport differs across countries, Sonova’s initiatives to promote environmentally friendly commuting are influenced by the local infrastructure. The headquarters in Stäfa established an integral mobility program which provides incentives to use public transport, accompanied by targeted awareness campaigns. This initiative started in 2006 and increased the proportion of employees who commute using public transportation, by foot, or by bike from 41% in 2006 to 61% in 2019. The target for 2025 is to achieve a share of 67% by further strengthening the mobility program. In 2019, Sonova France also launched a mobility program, with elements including installation of charging stations for electric vehicles and financial incentives for using public transport.

Upstream transportation and distribution

In product distribution, air freight is clearly the dominant contributor to Sonova’s carbon footprint, accounting for around 98% of relevant CO₂ emissions. Based on a study conducted in 2017, the carbon emissions for the hearing instruments segment are estimated at 10,708 t CO₂eq in absolute terms and 7.2 kg CO₂eq per kg transported in relative terms. The equivalent carbon emissions for the cochlear implant segment were estimated at 835 t CO₂eq and 4.0 kg CO₂eq per kg transported, respectively. The study is not carried out every year, so total Scope 3 emissions for upstream transportation and distribution for 2019 are estimated at 11,543 t CO₂eq, based on the 2017 study results.

Eco-friendly products

Sonova is committed to minimize the impact of its products and packaging on the environment and human health throughout the entire life cycle and to foster the transition toward a more circular economy. Our global environmental program covers the different stages of the product life cycle from product design, to procurement and manufacturing, packaging and distribution, consumer use, and end-of-life.

Product design

Sonova performs Life Cycle Assessments (LCA) as part of the product research and development phase. The aim is to reduce the use of hazardous substances, avoid other environmental risks, minimize consumption of resources, and design for recycling and easy end-of-life treatment.

Through new approaches in product design, we are trying to shrink the size of products and reduce material use. One example is RogerDirect™, introduced this year. Since 2013, Roger™ communication technology has bridged the understanding gap in loud noise and over distance by wirelessly transmitting a speaker’s voice directly to the listener. Until now, hearing aid wearers had to plug an extra component into their hearing aids or use an intermediary streamer to receive the Roger signal. Marvel hearing aids with RogerDirect eliminate the need for extra components or accessories, resulting in a device that is up to 42% smaller.

As a medical device manufacturer, the Sonova Group takes a proactive approach to evaluating materials in its products and components to assess environmental, health, or safety risks. Sonova may restrict substances because of customer or legal requirements, or because the company believes it is appropriate, based on a precautionary approach. Evaluating alternative materials is a continuous process, relevant to all stages of the production.

The main materials used in Sonova products are polymers (e.g. nylon, silicone, acrylonitrile-butadiene-styrene, acrylic polymers), metals (steel, titanium, tin), and semimetals (e.g. silicon). Sonova complies with the EU directive on Restriction of Hazardous Substances (RoHS 2015/863/EU), which governs the use of heavy metals and halogenated compounds in electrical and electronic equipment, and with the EU’s regulation on the Registration, Evaluation, Authorization and Restriction of Chemicals (REACH EC 1907/2006) for the safe manufacture and use of chemical substances throughout their lifecycle. Sonova’s suppliers are also required to prove their compliance with the RoHS directive and the REACH regulation in their respective processes and supply chains.

In accordance with REACH regulation, Sonova continuously updates the list of substances of very high concern (SVHC) that may be present in its products above the regulatory threshold level of 0.1% by weight of the article. This list is made publicly available on the Phonak website. By the end of the 2019/20 financial year, there were four SVHC substances requiring communication in accordance with the REACH regulation: DEHP, 1,3-propanesultone, lead titanium trioxide, and lead. It is our target to have zero SVHC present in Sonova products above the 0.1% threshold level by 2022.

Other substances classified as hazardous – but excluded from the RoHS directive – include solder paste and wire, paint, organic solvents, oil emulsions, mineral oil, and water-based cleaning solution. Employees who work with chemicals and hazardous substances, or come into contact with them, are regularly trained in their safe handling.

Procurement and manufacturing

We insist on environmentally friendly business practices throughout our supply chain: we do not restrict our environmental standards to our own operations, but consider them equally crucial in selecting our suppliers. The Sonova Group Supplier Principles recommend that suppliers use the international ISO 14001 standard as the starting point and basis for their work. All new suppliers are screened using environmental criteria. Our target for 2022 is to increase the share of our purchase volume from suppliers with certified environmental management systems (EMS) to 75%. In 2019, we increased the share of our purchase volume coming from suppliers with certified EMS to 72% (2018: 66%). This assessment was made based on desk research as well as internal or external audits and visits. However, based on our supplier visits and assessments, the percentage of suppliers actively using an environmental management system and complying with certain environmental standards (with or without certification) is even higher and above 90% of the purchasing volume.

Sonova has been advancing the industrial use of 3D printing technology for many years: at the beginning of the millennium, Sonova was one of the first companies to start digitally producing custom shells for In-The-Ear (ITE) hearing aids and earpieces. Today, we print hundreds of thousands of custom-made products every year, such as the Virto™ M-Titanium, combining the strength and lightness of titanium with the versatility of 3D printing to produce Phonak’s smallest custom ITE hearing aid – and saving material with a shell that is thinner than traditional custom shells.

Packaging and distribution

We continuously strive to further reduce the waste we generate, and the carbon footprint of our product packaging and transportation. Our current focus is the SLIM Packaging Project which aims at substantial reduction in the packaging size and weight of selected hearing aids, along with the number of hard cases. A new SLIM packaging solution implemented in 2019 allowed us to decrease the amount of packaging materials and improve the carbon footprint relative to the previous packaging concept by almost 40% per shipped pair, as revealed by an internal comparative screening life cycle analysis. The largest climate change impact from our packaging arises in the transportation phase. Since the SLIM packaging is lighter, the impact from transport is significantly lower.

Consumer use

An important task in our research and development process is improving the energy efficiency of our products to reduce energy consumption during the use phase. We also provide a broad range of repair and refurbishment services to lengthen the life cycle of our products and their components.

Since 2018, we have continuously increased the proportion of products that are based on our proprietary SWORD™ (Sonova Wireless One Radio Digital) chip – a low-voltage radio chip with the lowest power consumption of any hearing aid using Bluetooth®¹ Classic, and the world’s such chip to be compatible with small hearing aid batteries.

Since 2016, Sonova’s Phonak, Unitron, and Hansaton brands have continuously expanded their portfolios of hearing aids with a built-in lithium-ion rechargeable battery. Our increasing focus on rechargeable hearing solutions helps us to reduce the use of disposable batteries. In 2019, with its Marvel 2.0 technology upgrade, Phonak expanded its portfolio of rechargeable hearing aids, introducing the Phonak Audéo™ M-RT Receiver-In-Canal (RIC) hearing aid with integrated T-Coil as well as the Phonak Bolero™ M Behind-The-Ear (BTE) and Phonak Sky™ M pediatric product families. In October 2019, Unitron expanded its portfolio based on the Discover platform and launched the new Stride™ P R (BTE) and Moxi™ Jump R (RIC) products, both featuring proven Sonova lithium-ion rechargeable batteries. As part of the EXCITE product series, Hansaton offers the lithium-ion powered AQ XC rechargeable devices, with 24 hour battery life between charges and only three hours’ charging time. Advanced Bionics also offers rechargeable battery options for cochlear implant sound processors.

Product end-of-life

Sonova complies with the EU directive on Waste Electrical and Electronic Equipment (WEEE), which requires such equipment to be returned to the manufacturer for recycling or environmentally friendly disposal.

Sonova Group companies from the Audiological Care business offer different battery collection programs, in which customers can bring the used hearing aid batteries back to the store or take home a box, collect their batteries and bring them back to the store for recycling. The batteries collected are forwarded and disposed of through officially authorized disposal agents. In 2019, a total of more than two metric tons of batteries were collected at different stores worldwide. One example is the battery collection initiative of Connect Hearing Canada, where customers can collect their used hearing aid batteries in “The Little Green Box” and return them to the clinic for recycling once the box is full.

Waste

For Sonova, dealing with materials sustainably means avoiding or reducing waste wherever possible, collecting recyclables separately and disposing of hazardous waste in environmentally compatible ways. Our long-term target for 2022 is to increase the recycling rate to 60% through group-wide efforts to reduce waste, improve waste separation and foster recycling.

In 2019, the recycling rate remained stable at 53%, We slightly reduced the volume of total waste by 1% compared to the previous year, despite an increase in production volume. Recycling waste decreased by roughly 2% compared to the previous year, to 1,146 metric tons. Solid waste sent to disposal, such as municipal solid waste or material left over from manufacturing processes, remained stable at 995 metric tons.

Sonova complies with legal requirements to transport and dispose of hazardous waste solely through officially authorized disposal agents. The main categories of hazardous waste substances are solvents, oil emulsions, paints, adhesives, soldering paste, filters, petroleum, and washing fluids. The amount of hazardous waste was slightly reduced in 2019 to 39 metric tons.

Waste

Water

Sonova uses water provided by utilities primarily for sanitary services and kitchen and garden areas. Our manufacturing processes do not require significant amounts of water. In our environmental program we therefore mainly focus on conserving water in our office buildings, e.g. with low-volume water equipment in restrooms.

Sonova takes a systematic approach to managing ESG risks, both in its supply chain and in its own operations. Risks related to water are reviewed and assessed together with all other business risks. Water availability and quality risks are not currently included in the Group Risk Map, as we do not consider them key risks.

The sources of all water withdrawn are municipal water supplies or other public or private water utilities. In 2019, water consumption at Group level was at 139,707 cubic meters (m³), which represents a slight decrease of 0.7% compared to the previous year. Our 2022 target is to reduce the total water consumption per employee to 17.3 m³, which corresponds to a reduction of 5% compared to 2017. Currently we are at 18.1 m³ water consumption per employee. This is a 0.3% reduction compared to 2017. We will further intensify measures to achieve our 2022 target.

Sonova returns water to the sewage system without contamination. The company has experienced no spills from operating processes or other instances of water contamination.

Water use

Biodiversity

Sonova’s global activities, products, and services are not considered to have a significant direct or indirect impact on biological diversity and natural ecosystems, such as loss of biodiversity, destruction of natural habitats, and deforestation.

Environmental reporting and system boundaries

Sonova’s environmental data monitoring and reporting includes energy consumption, carbon footprint, materials, waste disposal, and water consumption and is based on the calendar year. The company reports and discusses environmental performance to the limits of the available data. Actual data was collected whenever feasible, and estimated if data collection was not feasible given the decentralized organizational structure of these businesses and their small, often rented facilities.

The tables above show environmental data from Sonova Group companies that operate as headquarters, manufacturing sites, wholesale distributors, as well as Group companies with audiological care activities. Energy consumption, car fleet and air travel data are provided for all entities in the 2019 environmental data reporting. Waste and water data were collected for all Group companies that operate as headquarters, key manufacturing and distribution centers, as well as larger wholesale distributors. For Group companies with only audiological care activities, waste and water data are only monitored where feasible and not included in this report. Overall, the entities covered in the waste and water data reporting account for 92% of Sonova’s employees (excluding employees of Group companies with only audiological care activities). Data for the AudioNova Group companies, acquired in September 2016, were included for the first time in the 2017 environmental reporting.

Sonova’s environmental management system monitors greenhouse gas emissions arising from its consumption of electricity, heating oil, natural gas, district heating, and vehicle fuels such as diesel and gasoline. The company measures its carbon footprint using country-specific grid emission factors and, if available, specific emission factors provided by energy utilities. Scope 2 emissions were calculated using the ‘market-based’ approach in accordance with the Greenhouse Gas Protocol Scope 2 Guidance. When reported according to the ‘location-basedʼ approach, the Scope 2 emissions were 23,561 t CO₂eq. Sonova purchased 6,727 MWh as renewable energy certificates (RECs), which were accounted for under the market-based approach for Scope 2. The measurement methodology and reporting format for the carbon footprint are based on the standards and guidance of the Greenhouse Gas Protocol. Sonova followed the financial control consolidation approach for setting organizational boundaries. Key emission factor sources for calculating greenhouse gas emissions include the International Energy Agency (IEA) for electricity and the UK Government GHG Conversion Factors for Company Reporting for other emissions sources. Global warming potentials from the IPCC’s fourth assessment report (AR4) were applied to calculate CO₂ equivalents. Relevant gases included are CO₂, CH₄, and N₂O.

Sonova differentiates between direct emissions (Scope 1) from sources such as burning natural gas, indirect emissions (Scope 2) from sources such as using electricity, and, starting in 2017, indirect emissions (Scope 3) from upstream transportation and distribution, business travel, and employee commuting. Since 2014, we have also investigated the environmental impact of our corporate car fleet – a further Scope 1 emission source. For the car fleet and air travel data, all Sonova Group companies were taken into account.