MESSAGE FROM THE CEO

Dear readers,

No business acts in a bubble. All are deeply affected by their surroundings – this world’s ecological, social, and geopolitical circumstances. But the impact goes two ways: businesses, by their behavior, can also influence the world. And it is Sonova’s fundamental belief that a company can only sustain success in the medium and long term, if it fully embraces its responsibilities towards all stakeholders and makes environmental, social, and governance (ESG) principles integral to its way of doing business.

Sustainability has long been anchored in Sonova’s corporate values: We care. We drive innovation. We strive for excellence. We take accountability. We build the best team. Through our core business, we make a positive impact on the quality of life of millions of people every day, enabling them to enjoy the delight of hearing through our innovative solutions.

We aspire just as much to have a positive effect on our society and the environment. Our IntACT ESG strategy puts this aspiration into practice. It builds on four key areas: serving society, advancing our people, acting with integrity, and protecting the planet. The name IntACT emphasizes the ultimate goal – keeping our planet and people intact – and underlines the urgent need to ACT.

As part of our commitment to transparent stakeholder dialogue, we have published this dedicated ESG strategy and performance report for over ten years. Its form and content are guided by international reporting frameworks, including GRI, SASB, and TCFD.

Let me highlight a few achievements on our ESG journey in 2021/22. We achieved carbon neutrality in our own operations (Scope 1 and 2) through energy efficiency measures, strongly increasing our renewable energy ratio, and investing in certified offsetting projects in China, Vietnam, and Brazil. We completed our first full Scope 3 assessment to quantify all greenhouse gas emissions along our value chain. This data will enable us to identify powerful CO₂ reduction measures. We also further aligned our climate risk disclosures with the TCFD recommendations.

On the social side, employee health & wellbeing remained a key topic. We implemented global measures including new hybrid working guidelines and appointed a global health manager to further develop and implement our worldwide program. We are also proud that 97% of non-production or assembly employees now have a personal development plan (against a target of 95%). In diversity and inclusion initiatives, over 97% of employees have received training on unconscious bias. The share of women in key positions has increased over the past year from 33.5% to 35.2%, approaching our target of 40% by the end of 2025/26. In governance, we conducted Sonova’s first pilot human rights impact assessment to further align our human rights due diligence with UNGP and OECD Guidelines.

Naturally, we have also faced challenges in achieving our ambitious ESG targets for this year. Although we initiated a program to reduce the environmental footprint of our packaging, our overall absolute weight of packaging increased in 2021/22, mostly due to strong business growth; we are therefore not yet on track towards our target of a 20% reduction in packaging by 2023. On the social side, the so-called “Great Resignation” in the wake of the pandemic had an impact on employee turnover, which emphasizes yet more the importance of development opportunities, health & wellbeing, and employee engagement. In governance, we need to focus even more strongly on product reliability advances in our hearing instruments and cochlear implants to achieve our ambitious target of a 20% year-over-year improvement in 2022/23.

We will continue to improve our ESG performance indicators with the same focus and intensity as we do our financial ones. ESG objectives remain part of the variable cash compensation of each member of the Management Board. Major rating agencies and sustainability indices such as the Dow Jones Sustainability Index and FTSE4Good confirmed our industry-leading ESG performance.

Sonova has been a signatory of the UN Global Compact since 2016, and we fully endorse its ten principles governing human rights, labor, environment, and anti-corruption. We also support the Sustainable Development Goals of the United Nations, which define the global sustainable development agenda through to 2030.

There is still a lot of work to be done. Together with more than 16,000 colleagues all over the world, we will continue to strive for improvement, driving impactful actions for our society and our planet – because it is the only one we have.

Sincerely,

Arnd Kaldowski
Chief Executive Officer