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Sonova ESG Report 2022/23

Protecting the planet

PROTECTING THE PLANET

We drive the transition to a resource-efficient and low-carbon future of our operations throughout the life cycle of our products and services.

Sonova has made an explicit commitment to protecting the planet by pursuing environmentally friendly practices throughout the whole life cycle of products and services and across all business activities. We set the priorities and provide the resources needed to reduce our environmental impact through responsible and efficient management of our buildings and infrastructure, processes, products, and services. Since 2021/2022, our commitment has been reflected in Sonovaʼs revised Corporate Environmental Policy, which has become effective as of April 1, 2022 and substantiates our dedication to environmentally proactive behavior and defines the companyʼs environmental management organization and responsibilities. As in previous years, no fines or non-monetary sanctions were levied against Sonova in 2022/23 for non-compliance with environmental laws or regulations.

Among other tools, we use environmental management systems (EMS) to ensure that environmental considerations are taken into account when designing, manufacturing, and servicing products. Key manufacturing and distribution centers for our Hearing Instruments and Cochlear Implants business have ISO 14001 certified EMS:

  • Sonova AG and Advanced Bionics AG (Stäfa, Switzerland)
  • Sonova Communications AG (Murten, Switzerland)
  • Sonova Operations Center Vietnam Co., Ltd. (Binh Duong, Vietnam)
  • Sonova Hearing (Suzhou) Co., Ltd. (Suzhou, China)
  • Sonova USA Inc. manufacturing and distribution centers (Warrenville/Aurora, USA)
  • Advanced Bionics LLC (Valencia, United States)

For non-manufacturing sites, Sonova has adapted the environmental management systems to ensure that environmental factors are integrated into decision-making and that environmental performance continues to improve.

This “Protecting the planet” chapter comprises the following sections:

Climate action

At Sonova, we acknowledge our responsibility to combat climate change. We recognize that a science-based approach and equitable transition to a zero-carbon economy are essential: for the planet, for the wellbeing of our employees and value chain partners, and for the continued success of our business. Our climate strategy addresses both mitigation of the causes of climate change and resilience to its effects, combining effective near-term actions to secure important long-term results.

Strategy and action plan

In 2022, we announced our commitment to the Science Based Targets initiative (SBTi) and submitted our near-term science-based targets. Our commitment is to reduce our combined absolute scope 1 and 2 greenhouse gas (GHG) emissions by 78.3% and 32.5% in scope 3 by 2032 compared to 2019, thereby aligning with the 1.5°C scenario for scope 1 and 2, and with the “well below 2°C” scenario for scope 3. These targets are currently under validation by the SBTi and are expected to be approved in the first half of the 2023/24 financial year. Sonovaʼs climate strategy defines our overall approach to reducing GHG emissions through actions of four types:

  • Measure emissions and continuously improve the data quality.
  • Avoid emissions by progressively adopting low-impact solutions.
  • Replace energy sources with renewable ones.
  • Engage and collaborate with value chain actors to drive actions.

Sonovaʼs action plan to address scope 1 and 2 emissions includes key measures such as further adopting energy efficient practices in our buildings, conducting energy studies across key sites, increasing the share of low-emissions vehicles in our company car fleet, and further incentivizing the use of renewable energy for electricity, vehicles, and heating wherever possible. We developed site-specific action plans for key locations. Sonovaʼs action plan for scope 3 emissions focuses on purchased goods and services, transport and distribution, and business travel. These categories make up over 80% of Sonovaʼs total scope 3 emissions across our value chain. Stakeholder engagement is key to drive emissions reductions, and we plan to work closely together with our suppliers toward a shared goal of a less impactful supply chain. Further priority tasks for the 2023/24 financial year are optimization of shipments, an increased shift from air to sea freight, and further development of internal travel policies.

GEERS environmental sustainability forum
In June 2022, approximately 20 GEERS employees ran a two-day brainstorming event in Dortmund, Germany to identify ways in which the German Audiological Care business could reduce climate impact and increase resource efficiency. They came up with suggestions that conserve energy, reduce packaging waste, and decrease paper consumption and marketing materials by digitalizing processes across the store network. The implementation of some of these actions began in October 2022 and is expected to generate noticeable reductions in energy consumption and related greenhouse gas emissions in 2023.

Energy

The total energy consumption of the Sonova Group in 2022 was 121,178 MWh. 51% was electricity consumption (for buildings and vehicles), 31% was for heating (using fuel oil, natural gas, biogas, and district heating), and 18% represented vehicle fuel (diesel, gasoline, liquefied petroleum gas, ethanol). Our Audiological Care business (AC) represented 56% of Sonovaʼs overall energy consumption, while shared business functions (e.g. headquarters, operation and repair centers, and other Group companies that perform tasks for multiple business units) and the Hearing Instrument business (HI) accounted for 17% each. Smaller proportions, 8% and 3% respectively, were attributable to the Cochlear Implants business (CI) and Consumer Hearing business. Total energy consumption increased by 21% in 2022 compared to 2021, with electricity consumption up 18% compared to 2021, heating consumption up 25%, and vehicle fuels consumption up 21%. The overall energy consumption increase was mainly driven by the addition of Alpaca stores and the Consumer Hearing business, which were included in our environmental data for the first time in 2022, as well as the opening of new Audiological Care clinics and increased mileage of our corporate car fleet.

Our Audiological Care business consumed the most electricity, together with shared business functions, mainly due to the large building footprint of the clinics network, along with shared business functionsʼ corporate buildings and operation centers. The increase in electricity consumption mostly stems from the addition of Alpaca and the Consumer Hearing business. Over 80% of heating energy consumption can be attributed to the Audiological Care business. This is due to the larger presence in Europe and Northern America, where cold winters make heating more necessary. The increase compared to the previous year is largely driven by the addition of Alpaca stores and the opening of new Audiological Care clinics. All the other business units and shared functions recorded a reduction in heating energy consumption, due to a comparatively warm winter and a series of efficiency measures. For example, in our corporate headquarters in Stäfa, Switzerland, heating energy use was reduced by 20% compared to 2021 by setting thermostats to slightly lower temperatures. The Hearing Instruments business accounts for 50% of the vehicle fuel consumption, followed by Audiological Care (41%). The Hearing Instruments business saw a 43% increase in vehicle fuel consumption compared to the previous year, mainly due to the increased mileage driven as sales representatives increased the number of customer visits. Shared business functions reduced their use of fuels by 58% compared to 2021, due to the change from diesel shuttle buses to new electric ones at our operation center in Suzhou, China.

Energy consumption

✔ Data externally assured (limited assurance)

MWh

 

 

 

 

 

 

 

 

2022

 

2021

 

2020

Total energy consumption 1

 

121,178

 

100,447 2

 

104,162 3

1) Includes energy consumption onsite (scope 1–2) and outside (scope 3, category 8) to maintain reporting boundaries as per previous years reporting. Energy consumption within scope 1–2 represents 97% of total energy consumption, and energy within scope 3 – cat. 8 represents 3% of total energy consumption for all reported years. Total energy consumption includes vehicle fuels, heating and electricity. Cooling and steam consumption are not included as not relevant.

2) 2021 value does not include Consumer Hearing business and Alpaca; value restated for methodological improvements: extrapolation factors adjusted to adapt to most recent information available from Group companies, resulting in 2021 value increasing by <1%.

3) 2020 value does not include Consumer Hearing business and Alpaca; value restated for methodological improvements: extrapolation factors adjusted to adapt to most recent information available from Group companies, resulting in 2020 value increasing by 3%.

Energy consumption by business

MWh

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2022

 

 

 

 

 

2021 2,3

 

 

 

 

 

2020 2,3

 

 

Vehicle Fuels 4

 

Heating 5

 

Electricity

 

Vehicle Fuels 6

 

Heating 7

 

Electricity

 

Vehicle Fuels 8

 

Heating 9

 

Electricity

Total 1

 

21,915

 

37,687

 

61,576

 

18,055 3

 

30,245 3

 

52,147 3

 

19,522 3

 

31,516 3

 

53,124 3

Hearing Instruments business

 

10,860

 

1,993

 

7,408

 

7,603

 

2,194

 

8,260

 

8,975

 

2,424

 

9,073

Cochlear Implants business

 

1,315

 

1,527

 

6,590

 

1,114

 

1,672

 

6,944

 

947

 

1,640

 

6,887

Consumer Hearing business

 

359

 

615

 

2,168

 

n/a

 

n/a

 

n/a

 

n/a

 

n/a

 

n/a

Audiological Care business

 

9,090

 

30,621

 

28,296

 

8,646

 

22,908

 

20,884

 

8,362

 

24,294

 

21,361

Shared business functions 10

 

291

 

2,932

 

17,114

 

693

 

3,471

 

16,059

 

1,238

 

3,156

 

15,802

1) Includes energy consumption onsite (scope 1–2) and outside (scope 3, category 8) to maintain reporting boundaries as per previous years reporting. Energy consumption within scope 1–2 represents 97% of total energy consumption, and energy within scope 3 – cat. 8 represents 3% of total energy consumption for all reported years. Total energy consumption includes vehicle fuels, heating and electricity. Cooling and steam consumption are not included as not relevant. Rounding effect might impact totals in table when cut-off rounding applies. Includes extrapolation where only partial data is available. Breakdown by Business based on FTEs.

2) 2020 and 2021 total energy consumption values restated for methodological improvements: extrapolation factors adjusted to adapt to most recent information available from Group companies. 2021 total energy consumption increased by <1%; 2020 total energy consumption increased by 3%.

3) 2021 and 2020 values do not include Consumer Hearing business or Alpaca.

4) 2022 vehicle fuels consumption sources: 61% gasoline, 38% diesel, 1% liquefied propane gas, <1% ethanol.

5) 2022 heating consumption sources: 83% natural gas (79% within scope 1, 4% within scope 3 – cat. 8), 11% district heating (scope 2), 4% biogas (scope 1), 1% Fuel oil (scope 1).

6) 2021 vehicle fuels consumption sources: 70% diesel, 29% gasoline, 1% liquified propane gas, <1% ethanol.

7) 2021 heating consumption sources: 78% natural gas (72% within scope 1, 6% within scope 3 – cat. 8), 14% district heating (scope 2), 6% biogas (scope 1), 2% fuel oil (scope 1).

8) 2020 vehicle fuels consumption sources: 55% diesel, 44% gasoline, 1% liquefied propane gas.

9) 2020 heating consumption sources: 90% natural gas (85% within scope 1, 5% within scope 3 – Cat. 8), 8% district heating (scope 2), 2% fuel oil (scope 1).

10) Shared business functions consist of headquarters, operation and repair centers, and other Group companies that perform tasks for multiple business units.

Sonovaʼs energy intensity (energy consumption relative to revenues) increased by 8% in 2022 compared to 2021, but remained 19% lower than 2020. The main reason for the lower increase in energy intensity compared to absolute energy consumption is the lower energy intensity of the newly added Consumer Hearing business compared to the other Sonova businesses, as it has a relatively small vehicle fleet and most of the manufacturing activities are executed by third parties.

Energy intensity

✔ Data externally assured (limited assurance)

MWh relative to million CHF revenue

 

 

 

 

 

 

 

 

2022

 

2021 1

 

2020 1

Total energy consumption 2,3

 

121,178

 

100,447 1

 

104,162 1

Revenues 4

 

3,738

 

3,364 1

 

2,602 1

Energy intensity 5

 

32.4

 

29.9 1

 

40.0 1

1) 2020 and 2021 figures do not include Consumer Hearing business or Alpaca.

2) 2020 and 2021 total energy consumption values adjusted for methodological improvements: extrapolation factors adjusted to adapt to most recent information available from Group companies. 2021 value increased by <1%; 2020 value increased by 3% (+2,777 MWh).

3) Includes energy consumption onsite (scope 1–2) and outside (scope 3, category 8) to maintain reporting boundaries as per previous years reporting. Energy consumption within scope 1–2 represents 97% of total energy consumption, and energy within scope 3 – cat. 8 represents 3% of total energy consumption for all reported years. Total energy consumption includes vehicle fuels, heating and electricity. Cooling and steam consumption are not included as not relevant.

4) Revenues provided for financial year.

5) Energy intensity figures restated to reflect adjustments in total energy consumption: 2021 value increased by <1%; 2020 value increased by 3% (+1.0).

As part of our continuous improvement approach, we are committed to reducing our energy consumption. We have therefore set the new target to reduce Sonovaʼs energy consumption per employee by 10% from 2022 levels by the end of 2027. The 2022 baseline value is 7.1 MWh/FTE; the target value is therefore 6.4 MWh/FTE.

Energy consumption reduction target:
We aim to reduce our energy consumption per employee by 10% by 2027 vs. 2022.

Sonovaʼs overall share of renewable energy remained essentially stable at 51% in 2022 (52% in 2021). Sonova is committed to sustained efforts to increase the share of renewable energy in the total energy consumption. Sonova uses 100% electricity from renewable sources. We follow a three-fold approach to achieve this. Firstly, we invest in onsite electricity generation. In 2022, onsite-produced solar electricity consumption more than doubled (1,603 MWh in 2022 compared to 786 MWh in 2021), mainly due to new installations in our operation center in Vietnam and at our headquarters in Switzerland. Secondly, Group companies where onsite generation is not yet feasible are prompted to locally source certified renewable electricity. Lastly, for all those Group companies where renewable energy is not yet used or available, Sonova purchases unbundled Energy Attribute Certificates (EACs).

Energy mix

✔ Data externally assured (limited assurance)

MWh

 

 

 

 

 

 

 

 

2022

 

2021 1

 

2020 1

Total energy consumption 2,3

 

121,178

 

100,447 1

 

104,162 1

Non-renewable energy consumption 4

 

59,813

 

48,108 1

 

84,964 1

Renewable energy consumption 5

 

61,365

 

52,340 1

 

19,198 1

Share of renewable energy 6

 

51%

 

52% 1

 

18% 1

1) 2020 and 2021 figures do not include Consumer Hearing business or Alpaca.

2) Includes energy consumption onsite (scope 1–2) and outside (scope 3, category 8) to maintain reporting boundaries as per previous years reporting. Energy consumption within scope 1–2 represents 97% of total energy consumption, and energy within scope 3 – cat. 8 represents 3% of total energy consumption for all reported years. Total energy consumption includes vehicle fuels, heating and electricity. Cooling and steam consumption are not included as not relevant.

3) 2020 and 2021 total energy consumption values adjusted for methodological improvements: extrapolation factors adjusted to adapt to most recent information available from Group companies. 2021 value increased by <1%; 2020 value increased 3% (+2,777 MWh).

4) 2020 and 2021 values restated due to adjustments as per 2). 2021 value increased by 4% (+1,751 MWh); 2020 value increased by 3% (+2,777 MWh).

5) 2021 value restated due to adjustments as per 2). 2021 value decreased by 2% (-1,338 MWh).

6) 2021 and 2020 values restated to reflect adjustments as per 4) and 5). 2021 value decreased by 2%, 2020 value decreased by 1%.

Greenhouse gas (GHG) emissions

We continued to make progress during the 2022/23 financial year on our journey towards decarbonization of our operations and value chain. We surpassed our five-year target of a 50% reduction in GHG emissions intensity from 2017 levels, which focused on scope 1, scope 2, and scope 3 air travel emissions. At the end of 2022, our GHG emission intensity stood at 6.7 tons of CO2e per million CHF revenues, compared with 18.6 in 2017, a 64% decrease. The main reason for this achievement is the switch to 100% renewable electricity in our operations.

As 2019 is the base year for our science-based scope 1-3 emissions reduction targets (currently pending validation), we recalculated our GHG emissions back to 2019, integrating the Consumer Hearing business and Alpaca data into the Sonova Group GHG accounting from 2019 – 2022. 2019 was selected as a base year as 2020 and 2021 scope 1-3 emissions were impacted by the Covid-19 pandemic. We also implemented various data quality and methodological improvements. As a consequence, our total 2022 scope 1-3 emissions amounted to 278,802 tons CO2e, a decrease of 8% from 2021. Overall, total emissions dropped by 22% compared to 2019. Compared to 2019, scope 1 emissions in 2022 declined by 10%, scope 2 emissions by 96%, and scope 3 emissions by 18%. Over 95% of our emissions are scope 3 emissions across Sonovaʼs value chain.

GHG emissions – Scope 1-31

✔ Data externally assured (limited assurance)

t CO 2 e

 

 

 

 

 

 

 

 

 

 

2022

 

2021 2

 

2020 3

 

2019 4

Scope 1–3

 

278,802

 

301,577

 

270,501

 

358,286

Scope 1–2

 

12,467

 

13,137

 

27,298

 

33,369

Scope 1 5,6

 

11,729

 

10,159

 

11,429

 

12,999

Scope 2 7

 

739

 

2,977

 

15,869

 

20,370

Scope 3 8

 

266,335

 

288,440

 

243,203

 

324,916

1) Includes Consumer Hearing business and Alpaca for all years.

2) 2021 values restated: scope 1 decreased by 1% (-132 t CO2e), of which 848 t CO2e derived from acquisitions and -980 t CO2e from methodological improvements; scope 2 increased by >1000% (+2,746 t CO2e), of which 2,110 t CO2e derived from acquisitions and 635 from methodological improvements; scope 3 increased by 94% (139,526 t CO2e), of which 100,719 t CO2e derived from acquisitions and 38,807 t CO2e from methodological improvements.

3) 2020 values restated: scope 1 increased by 3% (+343 t CO2e), of which 806 t CO2e derived from acquisitions and -463 t CO2e from methodological improvements. scope 2 increased by 15% (+2,049 t CO2e), of which 1,919 t CO2e derived from acquisitions and 130 t CO2e from methodological improvements. scope 3 increased by 104% (+123,789 t CO2e), of which 93,793 t CO2e derived from acquisitions and 29,996 t CO2e from methodological improvements.

4) 2019 values restated: scope 1 decreased by <1%; scope 2 increased by 13% (+2,326 t CO2e), of which 2,153 t CO2e derived from acquisitions and 173 t CO2e from methodological improvements; scope 3 increased by 106% (+166,946 t CO2e), of which 119,979 t CO2e derived from acquisitions and 46,967 t CO2e from methodological improvements.

5) Methodological improvements implemented for 2021, 2020 and 2019 figures include: heating consumption figures review, heating sources re-mapping, and extrapolation factors enhancement.

6) Outside-of-scope CO2 emissions from biogenic sources (biogas consumption) amounted to 296 tons CO2 in 2022, 367 t CO2 in 2021, and 0 t CO2 in 2020 & 2019.

7) Methodological improvements implemented for 2021, 2020 and 2019 figures include: review of district heating usage.

8) For details about methodological improvements applied to scope 3 categories please refer to the specific scope 3 table.

In the table below, you find scope 1-3 emissions data for 2021 and 2020 that do not include the emissions from the Consumer Hearing business and Alpaca. The integration in 2022 is the main reason for the substantial increase of over 40% in scope 1-3 emissions compared to the prior year. The Consumer Hearing business is also more emission intensive than Sonovaʼs other businesses: high sales volumes of products that are significantly heavier than e.g. hearing instruments. Due to the addition of the Consumer Hearing business and Alpaca, the overall Sonova Group scope 1-3 emissions intensity increased from 58.8 to 74.6 tons CO2e per million CHF revenues in 2022.

GHG emission intensity

✔ Data externally assured (limited assurance)

t CO 2 e relative to million CHF revenue

 

 

 

 

 

 

 

 

2022

 

2021 1

 

2020 1

Revenues 2

 

3,738

 

3,364 1

 

2,602 1

Total scope 1–2 GHG emissions 3

 

12,467

 

10,178 1

 

24,573 1

Scope 1–2 GHG emission intensity

 

3.3

 

3.0 1

 

9.4 1

 

 

 

 

 

 

 

Total scope 1–3 GHG emissions 4

 

278,802

 

197,899 1

 

173,983 1

Scope 1–3 GHG emission intensity

 

74.6

 

58.8 1

 

66.9 1

1) 2020 and 2021 figures do not include Consumer Hearing business or Alpaca.

2) Revenues provided for financial year.

3) 2020 and 2021 figures restated. 2021 figure decreased by 3% (-345 t CO2e) and 2020 figure decreased by 1% (-333 t CO2e) due to methodological improvements mainly linked to the inclusion of increasing number of Group companies using district heating.

4) 2020 and 2021 figures restated. 2021 figure increased by 24% (+38,463 t CO2e) and 2020 figure increased by 21% (+29,663 t CO2e) due to methodological improvements encompassing mainly the inclusion of more spent-based data in category 1.

Scope 1 and 2 GHG emissions

Scope 1 emissions are direct CO2e emissions related to company vehicles, stationary combustion (e.g. heating), and fugitive emissions (e.g. from refrigerants), while scope 2 emissions relate to indirect GHG emissions (e.g. from electricity consumption and district heating). Sonova Groupʼs absolute CO2e footprint of scope 1 and 2 emissions for 2022 decreased by 5% compared to the previous year.

In 2022, overall scope 1 GHG emissions increased by 15%, or 1,569 tons CO2e, compared to 2021, originating from a rise in emissions from both heating of buildings (+17%) and the corporate car fleet (+16%). The increase in heating mostly stems from the opening of new Audiological Care clinics. We also implemented various energy conservation actions, including lower temperatures and activities to drive behavioral change of employees at audiological care clinics. The higher emissions from Sonovaʼs owned and leased corporate vehicle fleet were mostly due to increased mileage. Our global car policy limits the CO2e per km emitted to 95 grams for newly purchased or leased cars. Hybrid and electric vehicles now constitute more than 20% of Sonovaʼs car fleet, compared with less than 8% last year.

In scope 2, our GHG emissions declined by 75%, or 2,238 tons CO2e, from 2021. We further increased our onsite generation of renewable electricity in Vietnam and Switzerland, switched various local electricity contracts to 100% renewable sources, and sourced the remaining electricity through unbundled Energy Attribute Certificates (EACs). Since 2022, we also source renewable electricity for our global vehicle fleet. The remaining 739 tons CO2e emissions in our scope 2 derive from the use of district heating mainly in northern European countries.

Sonovaʼs own operations (scope 1 and 2) have been carbon-neutral since 2021. In 2022, Sonova offset its remaining scope 1 and 2 emissions of 12,467 tons CO2e through three projects: hydro power in China, solar power in Vietnam, and forest protection in the Brazilian Amazon. All three projects are either verified by the Gold Standard or VCS (Verified Carbon Standard), two of the worldʼs most widely used verifying bodies for carbon credits.

We continue to develop local carbon footprint reduction measures to improve energy efficiency in our infrastructure and production processes. Examples include identifying heat leakage, consolidating facilities, installing charging stations for electric vehicles, and further improvements in building automation to optimize electricity use in heating, ventilation, and air conditioning.

Scope 1 and 2 GHG emissions1

t CO 2 e

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2022

 

 

 

 

 

2021 2

 

 

 

 

 

2020 3

 

 

Scope 1–2

 

Scope 1

 

Scope 2

 

Scope 1–2

 

Scope 1

 

Scope 2

 

Scope 1–2

 

Scope 1

 

Scope 2

Total

 

12,467

 

11,728

 

739

 

13,136

 

10,159

 

2,977

 

27,298

 

11,429

 

15,869

Hearing Instruments business

 

3,047

 

3,025

 

22

 

2,417

 

2,383

 

34

 

4,670

 

2,718

 

1,952

Cochlear Implants business

 

657

 

651

 

5

 

649

 

644

 

5

 

2,268

 

587

 

1,681

Consumer Hearing business

 

210

 

207

 

4

 

1,199

 

261

 

938

 

1,079

 

271

 

808

Audiological Care business

 

8,131

 

7,512

 

618

 

8,169

 

6,393

 

1,776

 

17,114

 

6,854

 

10,260

Shared business functions 4

 

422

 

332

 

90

 

703

 

478

 

225

 

2,167

 

999

 

1,168

1) Includes Consumer Hearing business and Alpaca for all years. Rounding effect might impact totals in table when cut-off rounding applies. Breakdown by Business Unit based on FTE numbers.

2) 2021 values restated: scope 1 decreased by 1% (-132 t CO2e), of which 848 t CO2e derived from acquisitions and -980 t CO2e from methodological improvements; scope 2 increased by >1000% (+2,746 t CO2e), of which 2,110 t CO2e derived from acquisitions and 635 from methodological improvements.

3) 2020 values restated: scope 1 increased by 3% (+343 t CO2e), of which 806 t CO2e derived from acquisitions and -463 t CO2e from methodological improvements. scope 2 increased by 15% (+2,049 t CO2e), of which 1,919 t CO2e derived from acquisitions and 130 t CO2e from methodological improvements.

4) Shared business functions consist of headquarters, operation and repair centers and other Group companies that perform tasks for multiple business units.

Scope 3 GHG emissions

Sustaining a sharp focus on reducing scope 3 emissions is crucial for Sonova, as our value chain accounts for 96% of our total GHG emissions in 2022.  More than 90% of our total scope 3 GHG emissions derive from the following scope 3 categories: purchased goods and services, transport and distribution, employee commuting, business travel, and use of sold products. Of the 15 scope 3 categories defined by the GHG Protocol, 13 are applicable to Sonova. Those not currently applicable are downstream leased assets and franchises.

Sonovaʼs scope 3 emissions decreased by 22,105 tons CO2e or 8% in 2022 compared to the previous year, when including the Consumer Hearing business and Alpaca in both years. This decrease mainly stems from purchased goods and services, use of sold products, and transportation and distribution. 

Scope 3 GHG emissions1

✔ Data externally assured (limited assurance)

t CO 2 e

 

 

 

 

 

 

 

 

 

 

2022

 

2021 2

 

2020 3

 

2019 4

Scope 3

 

266,335

 

288,440

 

243,203

 

324,916

Category 1: Purchased goods and services

 

155,902

 

175,992

 

144,160

 

181,643

Category 2: Capital goods

 

2,124

 

2,353

 

1,352

 

3,073

Category 3: Fuel- and energy-related activities (not included in scope 1 + 2)

 

9,055

 

8,265

 

6,762

 

7,609

Categories 4 and 9: Upstream and downstream transportation and distribution

 

49,987

 

54,695

 

44,982

 

57,232

Category 5: Waste generated in operations

 

406

 

500

 

1,066

 

1,222

Category 6: Business travel 5

 

12,232

 

4,445

 

6,109

 

24,021

Category 7: Employee commuting 6

 

21,348

 

21,136

 

18,045

 

26,761

Category 8: Upstream leased assets 7

 

873

 

1,177

 

1,326

 

1,474

Category 10: Processing of sold products

 

210

 

236

 

200

 

207

Category 11: Use of sold products

 

11,581

 

16,829

 

16,725

 

19,024

Category 12: End-of-life of sold products

 

2,340

 

2,716

 

2,383

 

2,563

Category 15: Investments

 

276

 

97

 

93

 

87

1) Includes Consumer Hearing business and Alpaca for all years.

2) 2021 values restated: total scope 3 increased by 94% (139,526 t CO2e), of which 100,719 t CO2e derived from acquisitions and 38,807 t CO2e from methodological improvements.

3) 2020 values restated: total scope 3 increased by 104% (+123,789 t CO2e), of which 93,793 t CO2e derived from acquisitions and 29,996 t CO2e from methodological improvements.

4) 2019 values restated: total scope 3 increased by 106% (+166,946 t CO2e), of which 119,979 t CO2e derived from acquisitions and 46,967 t CO2e from methodological improvements.

5) In order to align with the SBTi’s GHG emission boundaries, emissions related to hotel stays were removed for all years.

6) In order to align with the SBTi’s GHG emission boundaries, work from home emissions were removed for all years.

7) Category 8 is now applicable to Sonova due to the acquisition of our Consumer Hearing business. In addition, the Shop-in-Shop presence from Boots Hearingcare in the United Kingdom and Ireland has been moved from scope 1 and 2 to scope 3 – category 8.

Category 1: Purchased goods and services

The largest source of Sonovaʼs GHG emissions derives from the procurement of direct and indirect materials and services. In 2022, 59% of scope 3 emissions arose from purchased goods and services. Compared to 2021, these emissions decreased by 11% in 2022. The majority of the reduction stems from the Consumer Hearing business, where sales of more CO2e intensive products declined. In the Hearing Instruments business, these emissions mainly originate from the procurement of electronic components, accessories, packaging, and batteries. Sonova has started to actively engage with key suppliers on GHG emission reductions during the 2022/23 financial year, and we are committed to further extend this engagement. We will also continue to improve the granularity and availability of data on our direct and indirect materials and services purchased across our business units.

Category 4 and 9: Transportation and distribution

Categories 4 and 9 include GHG emissions arising from the transport from supplier facilities to our operation centers, intercompany transportation, and from our distribution centers to audiological care clinics (owned and third-party) or other customers. Air freight in product distribution is the main contributor to our GHG emission footprint, accounting for around 88% of CO2e emissions from transportation and distribution. While overall shipping volumes (by weight) increased slightly during 2022, Sonovaʼs GHG emissions from transport and distribution decreased by 9% compared to 2021. In the Consumer Hearing business, freight transported by air decreased by 30% and was instead transported by sea. For the Hearing Instruments and Cochlear Implants businesses, air freight transportation remained unchanged. Sonova remains committed to switch to lower-polluting modes of transportation where this is feasible. We continue to work towards further reductions in packaging weight and volume, and are revisiting our global distribution network to shift towards more regional sourcing to reduce transportation distances.

Category 6: Business travel

Air travel accounts for more than 90% of business travel emissions. Compared to 2021, our GHG emissions from business travel have significantly increased after the easing of COVID-19 related restrictions. However, business travel emissions still remain 49% below pre-pandemic levels. In the coming financial year, we will identify systematic measures, guidelines, and rules for more responsible business travel.

Category 7: Employee commuting

Sonovaʼs GHG emissions from employee commuting remained stable compared to 2021. Sonova launched a hybrid working guideline for office-based employees in August 2021, which was rolled out across the Group in the 2022/23 financial year. Local commuting options differ greatly from region to region, so localized solutions are essential for minimizing commuting related GHG emissions. Several Sonova Group companies have launched mobility programs to promote environmentally friendly commuting. These include financial incentives for public transport, installment of charging stations for electric vehicles, or provision of electric shuttle buses.

Category 11: Use of sold products

Almost 80% of emissions in this category stem from the Consumer Hearing business product portfolio, as audiophile and other headphones and soundbars require more energy over their life cycle than do hearing aids. The CO2e emissions related to Sonovaʼs hearing instruments and cochlear implants during their use phase are low, as these devices generally use little energy. GHG emissions compared to 2021 decreased by 31%, mostly due to changes in the Sennheiser product portfolio.

Climate-related risks and opportunities (TCFD)

The implications of a changing climate are far-reaching and complex, posing risks and opportunities to societies and businesses. These risks and opportunities can be broadly sorted into two categories:

  • Physical risks from impacts of climate change on the environment: chronic, such as sea level rise; or acute, such as more frequent and severe weather events. These risks can lead to significant economic and social impacts, such as property damage and disruptions to supply chains.
  • Transition risks and opportunities: the changes needed to move to a low-carbon economy (e.g. on legal, policy, market, or technology level), which can have negative or positive effects on businesses, investors, and governments.

Governance

The Sonova Board of Directors has ultimate oversight and responsibility for climate-related risks and opportunities. The Board of Directors and its committees receive updates on climate change topics at most of their regular meetings, and also receive a monthly written update from the CEO on overall progress in selected ESG topics, including climate-related matters.

On the Management Board level, responsibility for environmental sustainability is assigned to the GVP Operations, who monitors progress on a monthly basis. The regional leads are responsible for implementation of measures. The ESG Council reviews progress on climate action in the quarterly meetings. 

Strategy and risk management

Sonova recognizes that an effective climate strategy requires systematic climate change scenario analysis. We initiated this during 2021/22 with a pilot scenario analysis project across seven countries where Sonova has a larger footprint: Vietnam, United States, China, Switzerland, Germany, United Kingdom, and Canada. During the 2022/23 financial year we extended the assessment to include an additional two countries – Australia and Brazil – and also performed a business impact assessment of one physical and one transition risk. The analysis comprised two scenarios: a “high-mitigation” below 2°C scenario, which is relevant to assess risks related to the transition to a low-carbon future, and a “business as usual” 4°C scenario, which helps to comprehend the physical risks associated with the intensification of widespread climate hazards. The high-mitigation scenario covered the short-term horizon (next 5 years) and both scenarios included a medium-term (2030) and a long-term horizon (2050). We are guided by the following four-steps approach:

  1. Screening and prioritization of risks and opportunities
  2. Hotspot analysis
  3. Deep-dive analysis of physical risks
  4. Identification of financial impacts

1. Screening and prioritization of risks and opportunities

Based on interviews with relevant internal stakeholders in the countries of focus, we conducted an assessment identifying a broad set of physical and transition risks that could potentially affect Sonovaʼs current business and value chain. This extends from our supply base all the way to our end-consumers. For potential physical risks, we used the EU Taxonomyʼs classification of climate-related hazards (2021) to generate a list of seven risks to which Sonova would be most vulnerable. 

TCFD – Potential physical risks

 

 

 

 

 

Physical risk type

 

Physical risk identified

 

Explanation

Acute

 

Heatwaves and extreme temperatures

 

Prolonged periods of abnormally hot weather

Acute

 

Wildfires

 

a large, destructive fire that spreads quickly over woodland or brush

Acute

 

Extreme cold

 

a spell of cold weather over a wide area

Acute

 

Heavy precipitation & flooding

 

the covering or submerging of normally dry land with a large amount of water

Acute

 

Heavy winds & storms

 

a violent disturbance of the atmosphere with strong winds and usually rain, lightning, thunder, or snow.

Acute

 

Tropical cyclones

 

a localized, very intense low-pressure wind system, forming over tropical oceans accompanied by strong rainfall and winds.

Chronic

 

Sea level rise and coastal flooding

 

an increase in the level of the world’s oceans due to the effects of global warming

Five areas were screened to identify transitional risks and opportunities: policy, litigation, technology, market, and reputation – all in the context of the transition to a low-carbon economy. Four key transition risks and two opportunities were identified:

TCFD – Potential transition risks

 

 

 

 

 

Transition risk type

 

Transition risk identified

 

Explanation

Policy & legal

 

Carbon pricing schemes

 

Carbon pricing schemes for the building sector

Policy & legal

 

Net zero retrofit requirements

 

Net zero retrofit requirements for commercial buildings (incl. rented facilities)

Policy

 

Scope 3 reductions

 

Lack of stringent policies to constrain suppliers to use low-carbon energy sources, thereby putting our scope 3 target potentially at risk

Policy

 

Increase in airfares

 

Potential cost increases for air travel resulting from carbon schemes and more stringent policy requirements

TCFD – Potential transition opportunities

 

 

 

 

 

Transition opportunity type

 

Transition opportunity identified

 

Explanation

Market

 

Energy savings due to net zero retrofits

 

Energy savings due to net zero retrofits and consumption of energy from low-carbon sources

Market

 

Electrification of transport sector

 

Cost savings due to the electrification of transportation sector as fuel costs increase

2. Hotspot analysis

For the physical risks, a literature review was conducted on the latest climate-science and relevant climate policies on a country-by-country base. This hotspot analysis gave us insights on the expected conditions and change of underlying risks and opportunities in the medium-term (2030) and long-term (2050) compared to the baseline period1 for each country considered. The expected change compared to the baseline period risks were classified as follows:

TCFD – Risk classification

 

 

 

Risk classification

 

Projected change (vs. baseline) 1

Not relevant

 

deemed as not relevant during the prioritization phase

Low

 

below 10%

Moderate

 

10–20%

High

 

20–30%

Very high

 

above 30%

1) The baseline period 1976 – 2005 was derived from the Coupled Model Intercomparison Project Phase 5 (CMIP5) data set. Where the supporting literature used different baselines or different future timeframes, we adjusted the baselines and/or the relative change accordingly.

The assessment results of nine countries showed that the physical hazards in the long-term (2050) represent a higher risk than in the medium-term (2030). The table below therefore highlights the long-term identified changes (2050 vs. baseline).

TCFD – Hotspot analysis of physical risks (2050 scenario)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Country

 

Heatwaves and extreme temperatures

 

Wildfires

 

Extreme cold

 

Heavy precipitation & flooding

 

Heavy wind and storms

 

Tropical cyclones

 

Sea level rise and coastal flooding

Vietnam

 

Not relevant

 

Not relevant

 

Not relevant

 

Very high

 

Not relevant

 

Low

 

Very high

United States

 

Very high

 

Very high

 

Low

 

Not relevant

 

High

 

Not relevant

 

Not relevant

China

 

Not relevant

 

Not relevant

 

Not relevant

 

High

 

Low

 

Low

 

Not relevant

Switzerland

 

Very high

 

Not relevant

 

Low

 

Not relevant

 

Low

 

Not relevant

 

Not relevant

Germany

 

Very high

 

Not relevant

 

Low

 

Not relevant

 

Low

 

Not relevant

 

Not relevant

United Kingdom

 

Very high

 

Not relevant

 

Low

 

Not relevant

 

Low

 

Not relevant

 

Not relevant

Canada

 

Very high

 

Not relevant

 

Low

 

Not relevant

 

Not relevant

 

Not relevant

 

Not relevant

Australia

 

Not relevant

 

High

 

Not relevant

 

Moderate

 

Not relevant

 

High

 

High

Brazil

 

Not relevant

 

Not relevant

 

Not relevant

 

Moderate

 

Not relevant

 

Not relevant

 

High

On the transition risks and opportunities, we determined their likelihood of materializing and affecting Sonova in the short-term (2025), medium-term (2030) and long-term (2050). The scenarios considered in this analysis are: the International Energy Agencyʼs (IEA) Stated Policies Scenario (STEPS), which projects a temperature increase of approximately 3°C by 2100 based on the current GHG emissions growth rate, and the Sustainable Development Scenario (SDS) that predicts global warming to be 1.75°C as strong international policy supports the transition to a low-carbon economy. In addition, national scenarios, policies and long-term strategies were reviewed for each of the assessed countries. The risks and opportunities were assigned a qualitative rating based on Sonovaʼs footprint within the respective jurisdiction and the likelihood that the identified topics would materialize. The matrix below shows the highest risks that were identified across all timeframes (2025, 2030, and 2050) and scenarios. The 2025 timeframe was included because transition risks and opportunities could materialize within a relatively short period.

TCFD – Hotspot analysis of transition risks (2025, 2030, and 2050 scenarios)

 

 

 

 

 

 

 

 

 

 

 

Country

 

Carbon pricing schemes

 

Net zero retrofit requirements

 

Scope 3 reduction

 

Increases in airfares

 

Energy savings due to net zero retrofits or electrification of transport sector

Vietnam

 

Not relevant

 

Low

 

Not relevant

 

Not relevant

 

Low

United States

 

Not relevant

 

Low

 

Not relevant

 

Not relevant

 

High

China

 

Not relevant

 

Low

 

High

 

Not relevant

 

Medium

Switzerland

 

Low

 

Low

 

Not relevant

 

High

 

High

Germany

 

Low

 

Low

 

Low

 

High

 

Low

United Kingdom

 

Low

 

Low

 

Not relevant

 

High

 

Low

Canada

 

Not relevant

 

Low

 

Not relevant

 

Not relevant

 

Low

Australia

 

Very High

 

Very High

 

Not relevant

 

Not relevant

 

Very High

Brazil

 

Very High

 

Not relevant

 

Not relevant

 

Not relevant

 

Not relevant

The results show a low risk in most cases, except for 1) challenges that Sonova may face in reducing scope 3 emissions, especially for suppliers in China, due to relatively underdeveloped regulatory frameworks failing to stimulate emissions reductions at the desired rate; 2) potential increases in Sonovaʼs operating costs from stricter aviation sector policies resulting in higher air-transportation fares and 3) the risks related to carbon pricing schemes in Australia and Brazil. The assessment also identified governmental incentives and support to reduce emissions in the building sector to be further potential opportunities.

3. Deep-dive analysis of physical risks

To better understand how physical climate related risks could affect Sonovaʼs operations and business in the long-term (2050), we performed a data-driven in-depth analysis for the four physical risks that scored very high in the hotspot analysis. The deep-dive focuses at risks at facility level, not only at country level as in the hotspot analysis. For Australia, Brazil, and China no physical risks emerged as being material to Sonova.

TCFD – Summary deep-dive analysis results1

 

 

 

 

 

Potential risk

 

Potential threat

 

Country

Heatwaves and extreme temperatures

 

The frequency and duration of heatwaves are projected to increased significantly, especially in the south and east of the US. Heatwaves may cause higher cooling costs and increase heat stress conditions for employees and customers. As elderly people are the most common demographic that experiences hearing loss and are also most affected by heat stress during heatwaves, they may not come to the stores, thereby affecting sales.

 

United States, United Kingdom, Germany, Canada

Wildfires

 

Average and maximum temperatures during wildfire season are projected to increase significantly, which leads to an increased risk in wildfires that may affect our production sites in California.

 

United States

Heavy precipitation and flooding

 

Heavy precipitation is expected to increase substantially in the Ho Chi Minh City region, which may cause supply chain and operational interruptions in our operation center due to flash and sustained flooding.

 

Vietnam

Sea-level rise and coastal flooding

 

As our operation center in Vietnam is located far inland, the projected sea-level rise and coastal flooding is expected to pose no substantial risk.

 

Vietnam

1) For this assessment, we used various datasets derived from General Circulation Model (GCM) and runs conducted under the CMIP5.

The continued execution of Sonovaʼs omnichannel strategy, which includes increased online sales and service presence, can help to mitigate some of the identified physical climate risks. Physical climate risks are also considered when opening new facilities and in the design of our supply chain.

4. Identification of financial impacts

During 2022/23, we started to assess the potential financial impacts of two specific climate-related risks:

  • Increasing heavy precipitation and flooding risks in the vicinity of our operation centers in Vietnam and China that could cause supply chain and operational interruptions (physical risk)
  • Increasing carbon prices impact on air-transportation fares (transition risk)

The “business as usual” 4°C scenario is likely to see heavy precipitation and substantially increased flooding risks around our operation center in Vietnam and, to a slightly lower extent, at our operation center in China. Such flooding events could potentially directly impact our production sites and indirectly lead to production interruptions, as flooded road networks, airports, or ports could prevent delivery of input materials to our operation centers. The in-depth analysis however showed, that the flood risk at the locations of our operation centers in Vietnam and China is not increasing, and local teams already have precautions in place for potential adverse weather events. The focus of the analysis was therefore extended to assess the potential flooding risk at the locations of critical suppliers, not just our own operation centers. We assessed the most critical suppliers for each operation center and determined criticality of suppliers by the ease of replacing them and by their sourcing volumes per operation center. The results showed that four supplier locations are at risk for river flooding and two supplier locations are at risk of coastal flooding. Under the applied scenarios, flood risk increased for one supplier that provides components for less than 1% of our manufactured products in China and Vietnam. For suppliers whose components are integrated in a large share of our Hearing Instruments, river flooding risks are expected to even decrease due to climate change. To calculate the potential financial impact on Sonova, we estimated the supplierʼs forced operational downtime, impact of supply shortage on our stock levels of key components, and revenue impact based on number of days the operation centers would not be able to produce goods. The assessment showed that there is a low risk today, in 2030, and in 2050 – in both the 2°C “high mitigation” and 4°C “business as usual” scenarios. The findings will feed into Sonovaʼs activities related to supply chain and inventory management as well as supplier engagement.

The second risk we analyzed was a transition risk: the potential financial impact of increasing carbon prices on air-transportation cost in Switzerland, Germany and the United Kingdom, as we had identified the highest potential risk in these three countries. We included both business-related air travel and air freight in our analysis. To calculate the financial impact, we modelled different scenarios, which were based various assumptions related to regional carbon price developments, aviation sector decarbonization path, development of global warming, Sonova business growth and our own greenhouse gas reduction pathway. The analysis showed that potential financial impacts from air freight are higher than those related to air travel. We further found that achieving our current science-based target (under validation) would lower potential carbon costs by 70% compared to a business as usual trajectory. As part of our climate strategy, Sonova aims to decrease its proportion of shipments by air freight relative to road or sea freight. Furthermore, Sonova is reviewing current travel policies to drive reductions in business-related air travel.

In the coming financial year, Sonova will continue to align closely with TCFD recommendations and increase the number of countries assessed to identify climate-related risks and opportunities in other geographies where Sonova is represented, as well as further advance on quantifying the financial impacts from climate-related risks and opportunities.

Eco-friendly products

We are committed to minimizing the impact on the environment and human health of our products and packaging throughout their entire life cycle, and to fostering the transition to a more circular economy. Our environmental actions cover different life cycle stages of our products, ranging from materials processing, to procurement and manufacturing, packaging and distribution, consumer use, and end-of-life handling.

Product materials

Sonova aims 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. As a medical and consumer device manufacturer, Sonova takes a proactive approach to evaluating materials in products and components to assess environmental, health, or safety risks. This evaluation process is continuous and applies to all stages of production. Employees who work with chemicals and hazardous substances, or come into contact with them, are trained annually in their safe handling.

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 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 life cycle. Sonovaʼs 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 products above the regulatory threshold level of 0.1% by weight of the article. By the end of 2022 there were three SVHC substances requiring communication in accordance with the REACH regulation: 1,3-propanesultone, lead titanium trioxide, and lead. We had set a target to have zero SVHCs present in Sonova products by the end of 2022, which has not been achieved. Additional substances were added to the REACH SVHC candidate list after the target was set, and it remains challenging to replace these with alternative materials that provide equivalent properties. Sonova will continue to ensure compliance with the necessary reporting requirements under the REACH regulation and the Waste Framework Directive (EU) 2018/851 whenever the use of SVHC compounds exceeds the 0.1% threshold. 

Procurement and manufacturing

We insist on environmentally friendly business practices throughout our value chain. The Sonova Group Supplier Principles recommend that suppliers use the international ISO 14001 standard as the starting point for their work. Since a large share of our environmental impact stems from our supply chain, we have started to engage with the most significant suppliers on such topics as greenhouse gas emissions accounting and setting emission reduction targets.

Packaging and distribution

Sonova is committed to reduce the environmental impact of our packaging. That is why we set the target to reduce product and transport packaging waste by 20% in terms of weight, compared to our 2019 baseline by 2023.

Packaging reduction target:
We aim to reduce packaging waste by 20% by weight by the end of 2023 (vs. 2019 baseline)*
*Includes transport packaging (excl. external distribution centers) and hearing instruments product packaging

Overall packaging weight increased by 4% in 2022 compared to 2021, and by 15% compared to 2019. This increase is mostly due to strong business growth. We are therefore unlikely to reach our target of a 20% reduction in packaging by the end of 2023. Despite challenges to achieving our target, we made progress on product and transport packaging during the 2022/23 financial year: we reduced the weight of several types of transport packaging box, resulting in overall savings of approximately 12 tons, and initiated further improvement actions. To accelerate the transition to eco-design principles for our packaging, we have appointed a Senior Packaging Designer.

Packaging

✔ Data externally assured (limited assurance)

metric tons

 

 

 

 

 

 

 

 

 

 

2022

 

2021 2

 

2020 2

 

2019 2

Packaging weight 1

 

1,382

 

1,324

 

1,033

 

1,201

1) Includes transport packaging (excl. external distribution centers) and hearing instruments product packaging.

2) 2019 – 2021 values restated, as some corrections on a variety of packaging articles weights were performed. 2021 value increased by 1% (+14 t); 2020 value increased by 1% (+10 t), and 2019 value increased by 1% (+14 t).

The Sustainable Product Packaging Policy, effective since 2021/22 and covering our Hearing Instruments business, provides general guidance on use of fully recyclable materials, the minimization of weight, volume, and hazardous materials, and suitability for reuse and recyclability. 

To better understand the potential environmental impact of packaging choices, we commissioned a team of external experts to make an in-depth analysis of representative product packaging systems, focusing on environmental indicators over the whole packaging life cycle and including GHG footprint, plastic leakage, recyclability, water footprint, and land use. The results of the assessment inform Sonovaʼs efforts toward a lower-impact packaging approach. 

Packaging workshop focused on environmental sustainability
A three-day cross-functional packaging improvement workshop at the end of the 2022/23 financial year brought together participants from Sonova headquarters in Switzerland, and our operation centers in the United States and Vietnam. Focusing on both product and transport packaging, the team developed a roadmap of actions aimed at reducing packaging waste across Sonovaʼs value chain in 2023/24 and beyond. The actions proposed include packaging simplification and harmonization among operation and distribution centers, better process definition, enhanced data management, and eco-design guidelines.

Consumer use

Rechargeable batteries help to reduce the use of disposable batteries, increasing the lifetime of the product and reducing often hard-to-recycle waste. Since 2016, Sonovaʼs Phonak, Unitron, and Hansaton brands have continuously expanded their portfolios of hearing aids with a lithium-ion rechargeable battery. In the 2022/23 financial year, 59% of total sold behind-the-ear and receiver-in-canal hearing instruments were rechargeable, representing an 80% increase compared to 2020/21. Advanced Bionics also offers rechargeable battery options for cochlear implant sound processors.

We also provide a broad range of repair and refurbishment services to lengthen the life cycle of our products and their components. In 2022/23, we further improved our processes related to testing of used devices at the repair centers of our Hearing Instruments business. This is expected to have a positive impact on reuse of devices and reduce electronic waste in the 2023/24 financial year.

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.

Selected Sonova Group companies in the Audiological Care business offer battery collection programs, in which customers can bring their used hearing aid batteries back to the store. The batteries collected are disposed of through officially authorized disposal agents. In 2022, more than four metric tons of batteries were collected at different stores worldwide, doubling the results of the previous year.

Waste

At Sonova, we support the transition towards a circular economy by optimizing the way we use materials, minimizing the extraction of natural resources, generation of waste, and related disposal costs. Sonova is committed to avoiding and reducing operational waste wherever possible, separating materials to enable recycling, and disposing of hazardous waste in environmentally compatible ways. Sonova complies with legal requirements in countries where we operate to transport and dispose of hazardous waste solely through officially authorized disposal agents. The main categories of hazardous waste substances are solvents, washing fluids, acids, oil emulsions, paints, adhesives, soldering paste, and filters.

Our five-year target from 2017 to 2022 was to increase the operational waste recycling rate to 60%. Due to data availability, the scope of the target was limited to headquarters, operation, distribution and repair centers, as well as larger Group companies. In 2022, the recycling rate remained unchanged from 2021 at 53%. We did not reach the target within the expected timeline, but group-wide efforts continue to be deployed to achieve better waste separation and establish new collaborations with waste management suppliers to increase the recycled share of various waste streams.

Waste – limited scope1

metric tons

 

 

 

 

 

 

 

 

2022

 

2021 2

 

2020

Total waste

 

1,720

 

1,793

 

2,013

Non-hazardous waste

 

747

 

783

 

894

Hazardous waste

 

66

 

66

 

56

Recycling waste

 

908

 

944

 

1,063

Recycling rate

 

53%

 

53%

 

53%

1) Limited scope includes headquarters, operation, distribution and repair centers as well as other Group companies with more than 50 full-time equivalent employees (FTEs) but excludes our Consumer Hearing business and Alpaca. As the recycling ratio target was only applicable to the limited scope, we will only report on full scope starting in the 2023/24 financial year.

2) 2021 figures restated due to data quality improvements. Non-hazardous waste increased by 2% (+12 t), recycling waste increased by <1%. Total waste figures adjusted as per waste components values changed as mentioned.

We further enhanced the scope of 2021 and 2022 waste data collection to the full Sonova Group and improved data granularity, especially a more detailed breakdown of prevalent disposal methods. Total waste increased by 11% to 3,260 tons during 2022 compared to the previous year, primarily due to the data integration of the Consumer Hearing business and Alpaca, and secondarily because of the progressive relaxation of COVID-19 restrictions (especially remote work). While hazardous waste remained stable, the overall waste increase was driven by the 14% growth of recycling waste, and by the 8% growth of non-hazardous waste compared to 2021.

Waste – full scope1

✔ Data externally assured (limited assurance)

metric tons

 

 

 

 

 

 

 

2022

 

2021 2

 

Total waste 1

 

3,260

 

2,931 2

 

Non-hazardous waste 3

 

1,534

 

1,415 2

 

Incineration with and without energy recovery

 

758

 

514

 

Landfill

 

776

 

900

 

Hazardous waste 4

 

72

 

71 2

 

Recycling 5

 

16

 

16

 

Incineration with and without energy recovery

 

34

 

34

 

Landfill

 

14

 

13

 

Other treatments

 

8

 

8

 

Recycling waste

 

1,654

 

1,445 2

 

Recycling rate

 

51%

 

49%

 

1) Includes waste produced onsite (scope 3 – cat. 5) and outside (scope 3 – cat. 8) to maintain reporting boundaries as per previous years reporting.

2) 2021 does not include Consumer Hearing business or Alpaca.

3) 2021 figures restated due to data quality improvements. Non-hazardous waste increased by <1%, recycling waste increased by 10% (+130 t).

4) Not extrapolated for Audiological Care as no hazardous waste is generated. FTEs considered: 9,191 in 2022, 8,473 in 2021.

5) Not included in recycling rate.

Sonova is committed to reducing the amount of waste that is generated by our operations. We have therefore set ourselves the new target to reduce our operational waste intensity by 5% by 2027 compared to 2022. The 2022 baseline value is 191.7 kg/FTE; the target value is therefore 182.1 kg/FTE. We intend to achieve this by optimizing and digitalizing processes, reducing packaging in transit between our operation, distribution and repair centers, and reusing materials where possible.

Operational waste reduction target: 
We aim to reduce our operational waste per employee by 5% by 2027 vs. 2022.

Environmental Kaizen at Repair Center
In September 2022, employees in our Repair Center for Southern Europe in Alicante, Spain, conducted an environmental Kaizen (a continuous improvement workshop) focused on reducing waste by optimizing packaging size, minimizing repair byproducts, and switching to recyclable packaging materials whenever possible. The actions identified by the team are expected to significantly reduce plastic and foam waste from the repair center.

Water

Although we do not require significant amounts of water in our manufacturing processes, we are committed to reducing our withdrawal of fresh water, especially in water-stressed regions. We use water primarily for sanitary services, building automation systems, kitchens, and garden areas – and therefore focus our conservation efforts on our office buildings, monitoring per-capita consumption to identify potential areas for improvement. The sources of all water withdrawal are municipal water supplies or other public or private water utilities.

Our five-year target from 2017 to 2022 was to reduce water consumption by 5% per full-time equivalent employee (FTE). Due to data availability, the scope of the target was limited to headquarters, operation, distribution and repair centers, as well as larger Group companies. Sonova achieved the target: water consumption decreased by 7%, from 18.2 m3/FTE in 2017 to 16.9 m3/FTE in 2022.

Water withdrawal - limited scope1

m 3

 

 

 

 

 

 

 

 

2022

 

2021 2

 

2020 2

Total water withdrawal

 

136,771

 

126,116

 

113,395

Water withdrawal per full-time employee (FTE) 3

 

16.9

 

15.9

 

15.4

1) Limited scope includes headquarters, operation, distribution and repair centers as well as other Group companies with more than 50 FTEs but excludes our Consumer Hearing business and Alpaca. As the recycling ratio target was only applicable to the limited scope, we will only report on full scope starting in the 2023/24 financial year.

2) 2020 and 2021 values restated due to data quality improvements. Water withdrawal for 2021 and 2020 decreased by <1%.

3) FTE numbers considered per December 31 of each calendar year.

We further enhanced the scope of 2021 and 2022 water data collection to the full Sonova Group. Overall water withdrawal increased by 17% compared to 2021, primarily due to the data integration of the Consumer hearing business and Alpaca, and secondarily due to the progressive relaxation of COVID-19 measures (especially remote work). 

Water withdrawal – full scope1

✔ Data externally assured (limited assurance)

m 3

 

 

 

 

 

 

2022

 

2021 2,3

Total water withdrawal 1

 

235,075

 

201,710 2

Water withdrawal per full-time employee (FTE)

 

13.8

 

13.2 2

1) Includes water withdrawal onsite (scope 3 – cat. 1 Water) and outside (scope 3 – cat. 8) to maintain reporting boundaries as per previous years reporting.

2) 2021 does not include Consumer Hearing business or Alpaca.

3) 2021 values restated due to data quality improvements. Water withdrawal for 2021 and 2020 increased by <1%. Water withdrawal per FTE increased by 1% (+0.1 m3/FTE).

Freshwater withdrawal remains an increasing concern for the worldʼs ecosystems and the human societies that rely on them. We therefore remain committed to reducing our water withdrawal. Over the next five years, we aim to decrease our water withdrawal intensity across the entire Group by 5% per employee, aiming at reaching 13.1 m3/FTE in 2027 from a baseline of 13.8 m3/FTE in 2022. The main focus will be on upgrading our infrastructure and setting up rainwater recycling systems where appropriate – especially at sites that are located in areas with high or very high water stress.

Water withdrawal reduction target: 
We aim to reduce our water withdrawal per employee by 5% by 2027 vs. 2022.

During the 2022/23 financial year, we further extended our physical water risk analysis for selected Sonova sites, using the WWF Water Risk Filter. The baseline water stress analysis (based on geographic water-catchment area – basin level) reported 24 sites out of the 57 assessed as being located in high or very high water stress risk areas. These 24 sites withdrew 52,641 m3 water during 2022, accounting for 22% of the overall Group water withdrawal. The sites with the highest water withdrawal in these areas are located in China, the United States, Germany, Spain, Israel, and Brazil. Primary sources of water withdrawn were groundwater (40,668 m3) and surface water (6,796 m3). Figures were partially extrapolated due to limited data availability.

Biodiversity

Over past years, the nature of our global activities, products, and services has not shown to significantly influence biological diversity directly. Nevertheless, in light of the rapid global decline of biodiversity and the threats imposed on natural ecosystems by climate change, we recognize the importance of formally assessing Sonovaʼs biodiversity dependencies and impacts. In the 2023/24 financial year, we are planning to further analyze Sonovaʼs biodiversity-related risk and to mapping potential impact hotspots across our operations, using a location-specific approach. The aim of the assessment is to support future identification of key measures to mitigate Sonovaʼs potential biodiversity dependencies and impacts, building on the “avoid, reduce, regenerate, restore, and transform” AR3T Action Framework presented by the Science-based Targets Network (SBTN). Sonova is monitoring the development of recommendations from SBTN and the Taskforce on Nature-related Financial Disclosures (TNFD).

Third-party stakeholders along our value chain are also deemed material to Sonovaʼs potential biodiversity impacts; we are currently re-evaluating our procurement practices to ensure our value-chain partnersʼ commitment to the protection of ecosystems and biological diversity.

Environmental reporting and system boundaries

Sonovaʼs environmental data monitoring and reporting includes energy consumption, CO2e footprint, materials, waste disposal, and water consumption, and is based on the calendar year. Sonova reports environmental performance to the limits of the available data. Actual data is collected whenever possible, and estimated if data collection is not feasible given the decentralized organizational structure of these businesses and their small, often rented, facilities.

The tables in the section ‘Protecting the planet’ show environmental data from Sonova Group companies that operate as headquarters, operation, distribution or repair centers, wholesale distributors, as well as Group companies with audiological care activities. CO2e footprint, energy consumption, waste, and water data are provided for all entities in the 2022 environmental data reporting. Data from the Consumer Hearing business and Alpaca Group Holdings LLC (Alpaca), which became part of the Audiological Care business in the 2021/22 financial year, are included in the figures from 2022 onwards. Sonovaʼs science-based target base year for greenhouse gas (GHG) emissions is 2019, so the Consumer Hearing businessʼs and Alpacaʼs GHG emissions are included for the years prior to their acquisition, unless otherwise stated. HYSOUND Group, acquired in the 2022/2023 financial year, is not yet included in the environmental reporting. Acquired businesses are only included in the Group environmental reporting after a full calendar year within Sonova.

Sonova differentiates between direct GHG emissions (scope 1) deriving from the combustion of fossil fuels; indirect GHG emissions (scope 2) from sources such as using electricity or district heating; and indirect emissions (scope 3) that arise from our value chain. 13 out of the 15 scope 3 categories defined by the GHG Protocol are currently applicable to Sonova. Sonova monitors scope 1 and 2 GHG emissions arising from consumption of heating oil, natural gas, biogas, vehicle fuels such as diesel and gasoline, refrigerants, as well as district heating and electricity. N2O and CH4 emissions from biogenic sources, e.g. biogas, are included in scope 1, while the related CO2 emissions are excluded in accordance with the GHG Protocol. Outside-of-scope CO2 emissions from biogenic sources amounted to 296 tons CO2 in 2022.

We measure our electricity-related footprint using country-specific grid emission factors. scope 2 emissions were calculated using the ‘market-based’ approach in accordance with the GHG Protocol scope 2 Guidance. When reported according to the ‘location-basedʼ approach, the scope 2 emissions were 18,973 tons CO2e. Sonova purchased 34,463 MWh as unbundled Energy Attribute Certificates (EACs), which were accounted for under the market-based approach for scope 2. Scope 3 Categories 4 and 9 (Transportation and distribution) as well as 6 (Business travel) include non-CO2-related emissions deriving from aviation. A radiative forcing multiplier of 1.9 is currently applied as recommended by the UK Department for Business, Energy & Industrial Strategy (BEIS).

The measurement methodology and reporting format for the carbon footprint are based on the standards and guidance of the Greenhouse Gas (GHG) Protocol. Sonova follows the financial control consolidation approach for setting organizational boundaries. Global warming potentials (GWP) from the IPCCʼs fourth assessment report (AR4) are applied to calculate CO2 equivalents. Relevant gases included are CO2, CH4 and N2O. Key emission factor sources for calculating GHG emissions can be found in the table below:

Emission factor sources for environmental reporting

 

 

 

Scope and category

 

Main emission factor sources

Scope 1

 

- BEIS Department for Business, Energy & Industrial Strategy

Scope 2

 

- Association of Issuing Bodies (European Residual Mix) - IEA International Energy Agency (Emissions Factors) - EPA Environmental Protection Agency (eGRID) - Environment and Climate Change Canada (Electricity Can Prov Terr)

Category 1: Purchased goods and services

 

- EcoInvent (version 3.7 and version 3.7.1) - BEIS Department for Business, Energy & Industrial Strategy - CEDA Comprehensive Environmental Data Archive (version 5.05) - Exiobase (version 3.3.18) - Quantis World Food LCA Database (version 3.5) - World Bank (Inflation, consumer prices [annual %] 2022 vs 2021)

Category 2: Capital goods

 

- Dell Carbon Footprints

Category 3: Fuel- and energy-related activities (not included in scope 1 and 2)

 

- BEIS Department for Business, Energy & Industrial Strategy - IEA International Energy Agency (Emissions Factors)

Categories 4 and 9: Transportation and distribution

 

- BEIS Department for Business, Energy & Industrial Strategy

Category 5: Waste generated in operations

 

- BEIS Department for Business, Energy & Industrial Strategy

Category 6: Business travel

 

- BEIS Department for Business, Energy & Industrial Strategy - CEDA Comprehensive Environmental Data Archive (version 5.05)

Category 7: Employee commuting

 

- BEIS Department for Business, Energy & Industrial Strategy - IEA International Energy Agency (Energy Efficiency Indicators)

Category 8: Upstream Leased Assets

 

- BEIS Department for Business, Energy & Industrial Strategy - Association of Issuing Bodies (European Residual Mix) - IEA International Energy Agency (Emissions Factors)

Category 10: Processing of sold products

 

- IEA International Energy Agency

Category 11: Use of sold products

 

- IEA International Energy Agency

Category 12: End-of-life of sold products

 

- BEIS Department for Business, Energy & Industrial Strategy

Category 15: Investments

 

- Estimate based on Bloomberg & CDP data

All conversion factors are presented to convert 1 input unit. The source for all conversation factors is BEIS Department for Business, Energy & Industrial Strategy.

 

 

Conversion Factor

 

Conversion Unit

Distance

 

 

 

 

Miles

 

1.6093

 

km

Energy

 

 

 

 

Therm

 

0.0293

 

MWh

Fuel oil liter

 

0.0100

 

MWh

Natural gas m3

 

0.0103

 

MWh

Gigajoule (GJ)

 

0.2778

 

MWh

Mass

 

 

 

 

Pound (lb)

 

0.4535

 

kg

Ton (US, short ton)

 

907.2

 

kg

Volume

 

 

 

 

US Gallon

 

3.7854

 

L

Imperial Gallon

 

4.5461

 

L

Megaliter

 

1,000

 

m 3