Sustainability Report Financial Year 2019/20 Wonderful Sound for All Contents

 WS Audiology 2 Sustainability Report 2019/20

Table of contents

03 Introduction 17 People 27 Business ethics and compliance 04 CEO letter 19 Diversity & Inclusion 28 Anti-corruption 06 At a glance 19 Employee engagement 28 Anti-competitive behavior 07 Business model 20 Child labor and forced labor 29 Grievance mechanism

08 Sustainability strategy 20 Freedom of association and 30 Supplier code of conduct and WS Audiology joined UN 09 Sustainability goals collective bargaining due diligence Global Compact in 2020 10 Responsible business 20 Health and safety 31 Product safety, marketing, and labelling 11 Sustainability targets and highlights 20 Human rights impact assessment 32 Data privacy and cyber security 21 Local community engagement 13 Creating positive impact 33 Governance and Materiality Assessment 14 Raising awareness and breaking barriers 34 Governance 16 Innovate for all markets 35 Materiality Assessment and Stakeholder Engagement

39 Factbook 40 ESG Performance 45 GRI index sheet 52 Assurance letter by third party

22 Planet 24 Clean Production 25 Product design Follow us 26 Circular business model 26 Greenhouse gas emissions Intro – Cover

 WS Audiology 3 Sustainability Report 2019/20

Introduction

04 CEO letter 06 At a glance 07 Business model 08 Sustainability strategy 09 Sustainability goals 10 Responsible business 11 Sustainability targets and highlights Intro – CEO letter CEO letter

4 WS Audiology CEO letter Sustainability Report 2019/20

Unlocking human potential by making wonderful sound part of everyone’s life 5 WS Audiology CEO letter Sustainability Report 2019/20

WS Audiology is an with hearing aids. We have now set We are committed to the Ten Prin- the target to have served at least 20 ciples of the United Nations Global ambitious company million people with hearing aids by Compact (UNGC). We actively con- with a dedicated team 2025. tribute to the UN Sustainable Goals We have set clear ESG and of people all over the (SDGs). An essential part of our sustainabili- sustainability goals. We have world who want to bring ty strategy is to increase awareness, We have set clear ESG and sustain- dedicated people. And we wonderful sound to all. access, and affordability. Many ability goals. We have dedicated have an inspiring purpose. That is our purpose, and people are not aware enough of the people. And we have an inspiring importance of good hearing, for purpose. As CEO of WS Audiology I As CEO of WS Audiology I it drives us in everything their mental health for instance. And feel the responsibility on my shoul- feel the responsibility on my we do. the stigma of wearing hearing aids ders to make this all happen. And I sometimes holds them back, even am grateful that the owners of WSA shoulders to make this all if they are aware. We are already support and stimulate us to achieve It is our goal to become an industry working on this by designing more our objectives as fast as possible. happen. leader and with that ambition comes attractive looking hearing aids. In a lot of responsibility: for our people, many places in the world people We owe this to our customers, our their jobs, our strategy, our financial have no access to hearing aids, while people, our families, our children. health, and the company culture. To- the need is very high. And for a lot of day, that is no longer good enough. people hearing aids are not afforda- We must all change, and we must do ble. It is our ambition to change that it quickly. That is our commitment To become a true leader, we must in line with our purpose. as WS Audiology, that is my personal also lead in sustainability. We have commitment. set the objectives to become the Another top priority is the environ- most environmentally friendly ment. We are committed to increas- hearing aid company, the most ing the share of renewable electricity diverse hearing aid company and and to be carbon neutral by 2025. the hearing aid company that serves the most people, doing more than And we will continue to further di- Eric Bernard anyone else to realize our purpose. versity. Of course, diversity is meant in the broadest sense, but special President and CEO Since the merger between Widex attention will be given to gender 30 June 2021 and Sivantos over two years ago, we diversity. have served over 5 million people Intro – Introduction Introduction

6 WS Audiology Introduction Sustainability Report 2019/20

At a glance

WS Audiology is a global leader in the hearing aid industry. We help millions of people regain and benefit from the miracle of hearing by designing and manufacturing innovative hearing aid devices and services. We improve people’s health, well-being, and quality of life as we strive to unlock human potential by making wonderful sound part of everyone’s life.

Through our global customer network of thousands of hearing care providers, as well as through our own retail, we help increase the awareness of hearing challenges and facilitate access to WS Audiology is Our Since the inception of WSA until professional care. headquartered in Denmark and the end of the reporting year Singapore and has more than 5 2020, we have sold hearing aid main production devices to 11,000 sites are in Denmark, employees in Singapore, China, 3.9 million Poland and the of people in more than 43 Philippines. countries. 130 countries. Countries with main production Countries with our presence Countries we serve with our hearing solutions Intro – Business models

7 WS Audiology Introduction Sustainability Report 2019/20

WSA Business Models WSA Product Brands

We have multiple, mutually reinforcing business Broad product portfolio, models to support the hearing impaired and hearing managed independently care providers. with clearly distinct value propositions

Wholesale Own Retail Stores Online Managed Care Diagnostics

• Independents

• Retail chains

• Governments

• Optical Intro – Sustainability strategy

8 WS Audiology Introduction Sustainability Report 2019/20

Sustainability strategy

Our sustainability strategy is driven by impact

We strive to make wonderful sound part of everyone’s life and contrib- ute to the health and well-being of millions of people while growing our business. We aim to reduce inequal- ity by ensuring access to affordable 3.9 hearing care. Moreover, we raise awareness of hearing health as a million global challenge and break down the stigma around wearing hearing aids. people with hearing loss were served with our We are committed to creating a hearing aids since the positive impact for all employees inception of WSA to the of WS Audiology. After establishing end of the reporting year WS Audiology through a merger of 2020. two companies, we embarked on a culture journey to define our core See page 42 for account- values, and it is crystal clear that ing principles. diversity and inclusion are key for us to be successful.

We want to minimize our nega- tive impact on the environment by reducing energy and resource consumption, waste generation and Wind turbine at our

overall CO2 emissions. HQ in Lynge, Denmark Sustainability goals

9 WS Audiology Introduction Sustainability Report 2019/20

Sustainability goals

We actively contribute to the following Sustainable Development Goals (SDG) and specific targets: Goal 1: Goal 2: Goal 3: Awareness Accessibility Affordability

We make people aware of hearing We make it easy to get hearing We bring relevant hearing solutions health and hearing solutions that fit solutions wherever people are. to all people, through technology personal needs. and commercial innovation.

3 .8

See page 37

5 5

. .

3

5 5 .

3 for details 1

1 1 2 1 2 .6 2 .4 .2 Goal 4: Goal 5: 8.8 Diversity & inclusion Environment 8.7 8.5

We foster the inclusion of people with diverse views, We take care of the planet we live on, and we therefore opinions, and backgrounds. evolve towards circular business models.

United Nations Sustainable Development Goals Intro – Responsible business

10 WS Audiology Introduction Sustainability Report 2019/20

Responsible business

Sustainability is in everything we do

Employee Talent attraction, development, We continue to ensure responsible engagement and retention business conduct. We make sure we are compliant with laws and have special attention for human rights, We ensure a high workplace satisfaction and actively en- We attract, develop, and retain the talents who are the key labor rights, and anti-corruption. gaged employees, while reducing employee turnover. drivers to deliver on our purpose.

Human rights & Supplier code of conduct labor rights and due diligence

We respect human rights. This is fundamental We ensure our suppliers live up to our expectations to our way of doing business. related to environment, human rights, labor rights and business ethics.

Business ethics & Governance & anti-corruption accountability

We are committed to working against corruption in all We set up a strong sustainability governance to ensure the its forms, by always acting professionally, fairly and with sustainability programs are anchored in the organization. integrity. Intro – Sustainability targets

11 WS Audiology Introduction Sustainability Report 2019/20

Sustainability targets and highlights

KPI Baseline Targets Accumulated Accumulated KPI Baseline Targets number number

Awareness Additional people 1.1 million (by 2020) 500 million (by 2030) Diversity and Gender in Group that become aware inclusion Management Team of hearing loss through Shoebox online and offline screening

Gender in Global Leadership Team Accessibility People served with 3.9 million (by 2020) 20 million (by 2025) hearing devices

Gender in Managerial Roles Affordability People served with 725,000 (by 2020) 4 million (by 2025) (Managers with affordable hearing direct reports) devices Female Male

See page 42 for accounting principles. 12 WS Audiology Introduction Sustainability Report 2019/20

Sustainability targets and highlights

KPI Baseline Targets KPI Baseline Targets

Reduce Share of renewable 16% (2020) 100% (2025) Human Rights Human rights No human rights Fully align management ­greenhouse electricity directly due diligence violation system with UNGP (2023) gas emission consumed by WSA

GHG emission 6,809 (2020) Carbon neutral in our

scope 1 (CO2-eq t) own operation (2025)

GHG emission 13,335 (2020) Carbon neutral in our scope 2 location own operation (2025) KPI Baseline Targets

based (CO2-eq t)

Supplier code of Percentage of GHG emission 463,400 (2020) Set science-based target conduct and due high-risk suppliers scope 3 (CO2-eq t) across all scopes (2023) diligence audited

* Number of audits reduced significantly comparing to previous year due to COVID-19 travel restrictions. KPI Baseline Targets

Circular Reused components economy and of returned hearing clean production devices to repair hearing devices

Reused components Non-reused components Create – Cover Create positive impact

13 WS Audiology Create positive impact Sustainability Report 2019/20

Create positive impact

14 Raising awareness and breaking barriers 16 Innovate for all markets

We work to raise awareness of hearing loss and provide pioneering technology and services that encourage and enable more people to live a better life. Maarten Barmentlo, Chief Marketing Officer Create – Raising awareness

14 WS Audiology Create positive impact Sustainability Report 2019/20

Raising awareness and breaking barriers

According to the World Health Organization (WHO), the majority of people suffering from disabling hearing loss are not equipped with hearing aids

By 2050, WHO projects that 1 in 4 We also work to provide hearing Goal 1: people will be living with some de- aids that fit with personal needs and Awareness gree of hearing loss. Yet, many peo- styles of people who suffer from ple are not aware of their hearing hearing loss but are limited from loss. Through our online platforms, accessing care for their condition we make hearing tests available to due to lack of accurate information people, wherever they are. and stigmatizing attitudes to ear diseases and hearing loss. We con- Shoebox portable cloud-based tinue to develop and launch hearing solutions allow people to take tests aids that break down the stigma and Goal 2: virtually anywhere. This solution was make hearing care acceptable for Accessibility originally designed to serve remote more people. areas and continues to enable hearing testing during the COVID-19 crisis.

Signia is about iconic innovation, challenging the status quo, consumer excitement, empowerment, and inclusion. We want to make sure that nobody feels left out when they look for a hearing solution that fits with their unique needs and styles.” Samy Lauriette, VP and Global Head of Brand Signia 15 WS Audiology Create positive impact Sustainability Report 2019/20

Move towards our ambition of bringing wonderful sound for All

Widex Moment provides the purest, Signia Styletto X comes with an Signia Silk X is nearly invisible in the most natural, and undistorted sound award-winning uniquely stylish de- ear for complete discretion. It is one ever heard in a hearing aid. sign*. The world’s first hearing aids of the world’s smallest hearing aids with acoustic-motion sensors enable and an ideal hearing solution for peo- people to hear clearly wherever they ple who value discretion above all. go and be an active part of every conversation. 1.1 million

Goal 1: people become Awareness aware of hearing loss through Shoebox online To maximize satisfaction with hearing aids, and offline screening, in addition to the people Widex believes that even when listening whose hearing is screened through a hearing aid the sound must be as in our retail shops, since the launch of Shoebox natural and un-changed as possible. This screening tools until end dedication to sound is seen in our rich heritage Goal 2: of the reporting year 2020. of delivering the ultimate sound quality.” Accessibility 725,000 Wibke Madsen, people served with VP and Global Head of Brand Widex affordable hearing aids since the inception of WSA until the end of the reporting year 2020.

See page 42 for accounting * Red Dot Design Award 2019 for Styletto Connect, iF Design Award 2019 for Signia Styletto principles. Create – Innovation for all markets

16 WS Audiology Create positive impact Sustainability Report 2019/20

Innovation for all markets

Goal 3: With an entrepreneurial mindset, we Moreover, we innovate beyond Affordability challenge the status quo to improve the product. Through commercial people’s lives around the world, and innovation, we bring complete and we always aspire to be at the fore- affordable hearing solutions to new front of innovation in every sense. markets.

WS Audiology has the ambition to We have served more than 800,000 bring relevant hearing solutions to people in China, India, Southeast all people, through technology and Asia, South America, Eastern Europe, commercial innovation. We continue Middle East, and Africa with our to develop excellent hearing instru- hearing aids during the past year. ments with innovative features and We will continue to innovate to bring fantastic sound quality for every- wonderful sound to all. body.

We have the industry’s strongest R&D team with over 900 employees. The team has already delivered a wealth of new platforms, form factors and designs resulting in a portfolio of 210 affordable products. And we continue to develop afforda- ble hearing aids to meet the needs of people all over the world. People – Cover People

17 WS Audiology People Sustainability Report 2019/20

People

19 Diversity & Inclusion 19 Employee engagement 20 Child labor and forced labor 20 Freedom of association and collective bargaining 20 Health and safety 21 Local community engagement

WS Audiology is characterized by diversity and our mutual commitment to create an inclusive working environment where diverse views, opinions and backgrounds are valued.

Nicolai Jensen, Chief Human Resources Officer People – People

18 WS Audiology People Sustainability Report 2019/20

People

We recognize that we are responsible for the impact of our business activities on our employees, collaboration partners and the people in the communities where we operate.

Our Code of Conduct reflects our belief that respecting human rights is fundamental to doing business. We support the ten principles of the United Nations (UN) Global Com- pact, the UN Guiding Principles on Business and Human Rights, and the principles defined within the Inter- national Labor Organization Core Conventions.

We are aware of the risks of human rights violations across our value chain and act on this responsibility by exercising our influence to pro- mote and protect the human rights of all those we work with. We contin- ue to monitor and mitigate any labor rights risks through complying with national legislation, having open and 72 honest relationships with employ- ees, and respecting their right to be unique nationalities informed, heard and to voice their are represented concerns in an open and transparent among our employees manner. People – Diversity and Inclusion

19 WS Audiology People Sustainability Report 2019/20

Diversity & Inclusion

We have a diverse group of employees Diverse group of employees in terms of nationality and age. 72 % unique nationalities are represented among more than 11,000 employees, 60 and the age distribution is varied with

15% of our employees being below the 40 age of 30, 57% between the age of 30-

50 and 28% above the age of 50. 20

Our diversity enables us to better 0 understand and serve our customer > 30 years 30-50 years < 50 years base, and we are committed to creat- ing an inclusive working environment where diverse views, opinions and backgrounds are valued. sition of gender and nationality at leadership courses is monitored and In 2020, we launched WS Audiology calibrated. Team for Inclusion, Diversity, and Equality (TIDE) in our US organiza- The Board of Directors currently tion. 11 colleagues were selected by consists of ten members. In 2019, a committee to be the first members we set a target of having two female of the TIDE Council, which steers our members of the Board of Directors efforts to further improve inclusion. by 2022. In 2020, Karen Prange joined the Board of Directors, and in Our Group Management is com- 2021, Malou Aamund was appointed Goal 4: Employee engagement prised of 13 members representing 9 as well. Diversity & nationalities with an 8% share of wo- inclusion men by end of FY19-20. The share of In September 2020, we launched We want to ensure high workplace ees were asked for their feedback women in Group Management and our Group Harassment Free Policy. satisfaction and actively engaged on three key relationships that make other managerial positions across It demonstrates our commitment to employees, while reducing employee a Great Place to Work®: Manage- the Group is not at the desired level. providing a safe environment for all turnover. ment, Employee and Job. These were We focus on ensuring that gender employees, free from intimidation measured on Credibility, Respect, diversity is promoted and endeavor on any ground and from harassment In October 2019, we completed the Fairness, Pride and Camaraderie. WS to have several options in terms of at work. We keep our grievance first WSA employee engagement Audiology’s overall score was 65%, gender and nationality when candi- mechanism open to any complaints We foster the inclusion survey facilitated by the Great Place and in six countries, we attained a dates are proposed, especially when related to harassment, and we seek of people with diverse to Work Institute®. It surveyed all Trust Index© of more than 70% to be we hire for leadership positions. In anonymous input through engage- views, opinions, and employees in the merged company certified as a Great Place to Work®. addition, we ensure that the compo- ment surveys. backgrounds. with a response rate of 87%. Employ- People – Child labour and other

20 WS Audiology People Sustainability Report 2019/20

Child labor and Freedom of association Human rights impact forced labor and collective bargaining assessment

The risk of child labor and forced We respect our employees’ freedom We will invite external independent labor in our own operation is low as of association and their rights to human rights experts to conduct a we deploy thorough hiring proce- collective bargaining also in coun- human rights impact assessment of dures, ensuring that we have no tries of operation where these rights WS Audiology in 2021. This will help child labor or any forms of forced are not inherent. The employee 15% us to validate our management ap- and compulsory labor in WSA. representatives in workers councils proach on human rights topics and in selected countries continue to of employees are identify areas to drive continuous The risk of child labor and forced facilitate the dialogue between the covered by collective improvements. labor in our supply chain is relatively company and employees regarding bargaining agreements. higher than in our own operation. employment conditions. Please read how we manage the risk through our supply chain due diligence on page 30.

Health and safety

WS Audiology is committed to provid- Our Health ing safe and healthy working condi- tions for our employees, contractors, and Safety and visitors, and systematically Management eliminating hazards and reducing risks as emphasized in our Environmental, Systems are Health & Safety Policy. aligned with ISO

We have established a management standards system in accordance with OHSAS 18001 at our manufacturing sites in Sin- gapore, China, Poland, and Denmark, covering the design and production of hearing aids and their components. People – Local community

21 WS Audiology People Sustainability Report 2019/20

Local community CASE engagement Disaster relief in Lebanon Helping others fully participate in life again is a great motivation for many On 4 August 2020, a terrifying of the employees who work for us. explosion ripped through the heart of Beirut, killing around We adhere to an “every-step- two hundred people, injuring counts” approach and encourage thousands, and damaging all employees to participate in any the hearing of many. WS activity that makes a positive dif- Audiology donated 100 Widex ference. We have a broad scope of Dream hearing aids to Leba- engagement that has been driven by non through one of our local the passion of our people. distributors to help those in

CASE need. Long-term cooperation with Lions Club

We work with the German Lions on the “Help for Little Ears” project, providing people in need with hearing aids and a chance to live independently. Through the project, implemented by the Lions Club Kelkheim, around 30,000 hearing aids from WS Audiology and other manufacturers have already been fitted to patients in many parts of the world. The hearing aids are passed on to charitable aid organizations for suitable projects. On-site specialists adapt the devices to the patients individually. Planet – Cover Planet

22 WS Audiology Planet Sustainability Report 2019/20

Planet

24 Clean Production 25 Product design 26 Circular business model 26 Greenhouse gas emissions

We want to be the best in servicing our end-users and partners, while simultaneously caring for our planet by reducing emissions, raw material consumption and re-using as many components as possible. Roberto Di Fiore, Chief Operation Officer Planet – Planet

23 WS Audiology Planet Sustainability Report 2019/20

Planet

Our environmental and climate impact is mainly related to material consumption for manufacturing our products, waste from our operations and packaging, electronic waste generated when our products are replaced as well as overall greenhouse gas emissions. Even though our products are small and energy consumption is limited, we still endeavor to improve resource efficiency and minimize our impact.

Our Environmental, Health & Safety Goal 5: Policy underlines our commitment to Environment ensuring that our product life cycle contributes to a sustainable future by continuously reducing our impact on the environment and climate. Planet – Clean production

24 WS Audiology Planet Sustainability Report 2019/20

Clean Production

Our main production sites in quality pertaining to non-hazard- Singapore, China, Poland, and the ous waste and work to increase the Our Philippines have implemented en- recycling rate. Environmental vironmental management systems according to ISO standards. Our pro- The production of hearing aids is Management duction site in Denmark is currently not intensive in terms of energy or Systems are in the process of being certified. water consumption. However, we are committed to reducing energy aligned with ISO We monitor relevant laws and reg- consumption and increasing the use standards ulation to ensure compliance and of renewable energy. work to continuously reduce water and energy consumption as well as One of our two headquarters, just waste generation. The effectiveness outside Copenhagen in Lynge, was of our environmental management designed to impact the surrounding system is reviewed by management environment as little as possible. The and through internal and external building has a geothermal system audits. that uses groundwater as a heat res- ervoir to store heating and cooling We ensure that hazardous waste is for an entire year’s consumption. A collected and disposed of in accord- windmill rises above the headquar- ance with applicable regulation, and ters, delivering excess energy to we continuously improve the data the electricity grid. The building is carbon neutral.

We are happy to see that our employees are becoming increasingly aware of the environmental impact of what we do, since our manufacturing was certified in accordance with ISO 14001.

Wilson Zheng, Global EHS Officer Signia ActiveSignia Recharge on the go – with a next level hearing aid style comparable state-of-the-art-earbuds. to 2021

Share of rechargeable rechargeable of Share hearing aids sold in FY19-20 30% Widex MOMENT mRIC MOMENT mRIC is a wirelessly offering aid hearing charged high reliability in combination with the purest, natural sound ever. 2020 Styletto The Styletto hearwear revolution rechargeable unique a uses technology, in a never-before-seen form factor: the “SLIM-RIC”. 2018 Planet – Product design Pure Charge & Go Nx Pure Charge & Go Nx is an inductively hearing rechargeable aid, combining the most natural own voice with convenient wireless rechargeability. 2018 Cellion primax Cellion was the world’s first hearing aid which not only had a lithium-ion battery but could also be recharged inductively. Planet 2016 Centra ActiveCentra Centra Active was the first hearing aid which promoted an active lifestyle: Water-resistant shell, hearing aid batteries, which could be “eCharger”. the in charged

of our rechargeable 2007 udiology design WS A Sustainability Report 2019/20 Siretta 339 Siretta 339 was the first hearing aid that was worn entirely in the could You ear. use it with either common hearing aid batteries or ones. rechargeable Product WS Audiology has always been a pioneer in hearing aid technology and the inventor of many world firsts – especially in the field of rechargeable hearing solutions, which save hundreds of batteries for one hearing aid user. But the history hearing aids is much longer: 25 1966 Planet – Circular business and others

26 WS Audiology Planet Sustainability Report 2019/20

Circular business model Greenhouse gas emissions

We are committed to transitioning We are working to improve our ener- Total emissions – Scope 1, 2, & 3 % share of Renewable Electricity to a circular business model re-using gy efficiency and reduce our green- (tCO2e) materials to the extent possible. house gas emissions, and in 2020, we assessed WS Audiology Group’s 63% of the components of returned greenhouse gas emissions. The data 6,809 13,335 16% hearing devices are reused to repair confirm that the emissions of our hearing devices. All reused parts own operation (scope 1 and 2) are have been thoroughly tested. We limited, while most of the emissions respect applicable regulatory frame- are in the value chain (scope 3). works where some do not allow for 100% re-usage. 463,400 84%

The remaining parts are sent for Scope 1 % of Renewable electricity recycling. Scope 2 % of Non-renewable electricity Scope 3

Our Climate Targets

We have committed to set climate targets in line with limiting the global temperature rise to 1.5°C. We have the ambition to achieve 63% 100% renewable electricity directly consumed by the Company and to be of the components carbon neutral in our own opera- of returned hearing tions by 2025. devices are reused to repair hearing devices

Set science-based target across 100% Renewable electricity directly Carbon neutral in our own opera- all scopes (2023) consumed (2025) tion (2025) Business – Cover Business ethics and compliance

27 WS Audiology Business ethics and compliance Sustainability Report 2019/20

Business ethics and compliance

28 Anti-corruption 28 Anti-competitive behavior 29 Grievance mechanism 30 Supplier code of conduct and due diligence 31 Product safety, marketing, and labelling 32 Data privacy and cyber security

We adhere to strict business ethics principles and work closely with our suppliers to ensure compliance with comprehensive regulatory demands as a medical device company.

Dawn Seah, Chief Legal Officer Business – Anti-corruption Business – Anti-competitive behavior

28 WS Audiology Business ethics and compliance Sustainability Report 2019/20

Business ethics

We are building a true global leader in our We take a zero-tolerance approach to corruption, industry on a foundation of healthy business including fraud and ethics and a well-structured approach to bribery. compliance across our Group.

Anti-corruption

We are committed to working business partners’ violation of our against corruption in all its forms, by anti-corruption commitment and the always acting professionally, fairly resulting potential legal and financial and with integrity. consequences. We have established multiple measures, such as vetting We take a zero-tolerance approach of all suppliers and ad-hoc evalua- to corruption, including fraud tions, to ensure that there is zero and bribery. This commitment tolerance of any corrupt behavior in Anti-competitive behavior and zero-tolerance approach are our business. entrenched in our Code of Conduct (“Code”), which guides the organi- Our Code, internal policies and train- We adhere to antitrust laws and enter into agreements with compet- zation and employees in conducting ings set the basis for our system, ensure fair competition. itors that could result in a restriction their day-to-day business. which is designed to prevent, detect, of competition. We do not use our and respond to potential violations We achieve our market position position in the market to discrimi- Anti-corruption considerations are of anti-corruption and bribery through the outstanding quality of nate against others through unfair an integral part of our business regulations. All employees at WS our products as well as our perfor- business practices. In addition, our partner handling process, and we Audiology must read and become fa- mance. We make sure that we do Ethical Guidelines in Competitive continue to ensure that our part- miliar with our Code, as its principles not discuss any antitrust-relevant Intelligence governs us when collect- ners acknowledge and respect their need to be a part of their daily work. information with competitors, sup- ing information about competitors responsibility when doing business Employees who are required to deal pliers, or customers. Further, we do in an ethical manner. Our approach with us. with customers, government-related not participate in any discussions or is aligned with SCIP*. bodies and other relevant stake- The main risks related to our holders are provided with regular * Strategic & Competitive Intelligence Professionals (SCIP) activities include employees’ and additional training. https://www.scip.org/page/Ethical-Intelligence Business – Grievance Mechanism

29 WS Audiology Business ethics and compliance Sustainability Report 2019/20

Grievance Mechanism

We are committed to fostering an The Ombudsman investigates every environment where our employees reported matter. If there is any can ask questions and raise issues or suspicion of violation, especially of concerns about business ethics and criminal nature or in defiance of our other topics without fear of retalia- Code, the reports will be forwarded tion. to the Group so that we can start investigations immediately. The Employees can raise concerns to identity of the informant will not be their managers, Legal Compliance revealed. Advisor, Regional Compliance Of- ficer, Human Resource Department. All emails and reporting are always Employees, and third parties can kept confidential to the extent per- raise concerns to [email protected] mitted by law and will only be shared and/or an external Ombudsman on a need-to-know basis with the anonymously. required person(s) who shall investi- gate and/or decide on the reported We follow up on every reported possible violation. violation with internal compliance investigations when justified by We have a policy of “zero tolerance” supporting evidence. Upon comple- for retaliation. Employees can report tion of an investigation, we propose issues and concerns in good faith solutions for any identified issues without fear of the consequences. and ensure they are carried out. We also respond to incidents of em- ployee misconduct with appropriate disciplinary action.

We have a policy of “zero tolerance” for retaliation. Employees can report issues and concerns in good faith without fear of the consequences. Business – Supplier code of conduct

30 WS Audiology Business ethics and compliance Sustainability Report 2019/20

Supplier code of conduct and due diligence

Our supply chain We find business relationships are every second year. Due to travel Our supply chain consists of direct more productive and effective when restrictions during the outbreak of material suppliers and indirect sup- they are built on trust, mutual re- COVID-19, we conducted 3 Suppli- pliers. The direct material suppliers spect, and common values, and seek er Code of Conduct audits in the provide us with batteries, plastics, relationships with suppliers who financial year 2019-2020, whereas we packaging, components, etc. Indirect share our vision. conducted 10 audits in the financial suppliers include real estate, facility year 2018-2019. Non-compliance management, and other service Risk assessment and supplier was not observed during any of the providers. due diligence audits in the financial year 2019-2020 As part of our sourcing procedure, or the prior financial year. Our main suppliers are located in all potential suppliers that enter ten- Europe, North America, and Asia. ders must sign the Code of Conduct Third party auditors have been for Suppliers. appointed to support in auditing Our Code of Conduct for high risk suppliers starting from Suppliers Based on the environmental, social, the financial year 2020-2021. The As reflected in our Code of Conduct, and governance risks of the coun- Supplier Quality Management team we recognize a range of operational tries in which we do business, we will continue to audit selected low- and reputational risks in our supply concluded that most of our suppliers risk suppliers to validate the risk chain, and we refrain from working are of low risk. threshold. with third parties that do not share our commitment to integrity. We conduct due diligence proce- Read more WSA UK Modern Slavery dures to evaluate the qualifications Act Statement FY19-20. The WS Audiology Code of Conduct and reputation of suppliers and for Suppliers reflects our internal avoid working with suppliers whose values and the expectations of exter- standards are incompatible with our nal stakeholders, such as customers, Code. Our Supplier Quality Man- regulators, investors, and the public. agement team audits key suppliers Business – Product safety

31 WS Audiology Business ethics and compliance Sustainability Report 2019/20

them into consideration when we Marketing and labelling Product safety, develop new products. To ensure the veracity of marketing claims, we maintain a claim man- • Our manufacturing sites in China, agement practice that establishes marketing, and labelling Denmark, Germany, the US, and the claim type and required data Singapore have all successfully substantiation. Each claim and passed the US Food and Drug supporting substantiation are listed As a medical device company, we understand that product Administration (FDA) audit inspec- in a platform evidence document. tions since 2018. Furthermore, each product launch is safety must never be compromised as errors in our hearing aids documented with a Clinical Evalua- or other devices could lead to significant and potentially life- • WS Audiology was the first hearing tion. aid manufacturing company that long damages to our consumers. It is equally important that our was successfully audited under We ensure that the product safety consumers get the right information that allows them to use our the EU’s new Medical Device Regu- manual for each product is included hearing aids safely. lation (MDR) and received the new in the package to every consumer certificates in Q1/2020. who purchases our hearing devices.

Our post market surveillance system We have zero incidents of non-com- enables us to follow and manage pliance with regulations and/or complaints. In case of safety issues, voluntary codes concerning prod- we have a procedure to report to au- uct and service information and thorities, and if necessary, call back labelling. products. Valuable information is fed Product safety In addition, by implementing our into the product risk management Our quality policy outlines our Product Related Environmental procedure. commitment to high quality and safe Protection (PREP) procedure, we Our quality management hearing solutions. comply with all legal environmen- Health and safety impacts are as- systems in main manu- tal obligations such as ROHS and sessed for improvement for all our facturing sites are ISO WS Audiology’s product risk man- REACH, and safeguard consumer product categories. 13485 certified. agement procedure is certified health. This is achieved through according to ISO 14971. We are com- systematic screening of substances mitted to minimizing the residual of concern and ensuring that none risks as far as reasonably possible to of them are included in the parts and avoid serious injuries. components delivered by suppliers. All relevant employees are trained to Our ISO 13485 certified multi-site strictly follow the PREP procedure. Quality Management Systems (QMS) allows global governance and local Our products are registered accord- adaptations to ensure efficient ing to local regulations. We continu- quality management throughout WS ously survey requirements and take Audiology Group. Business – Data privacy

32 WS Audiology Business ethics and compliance Sustainability Report 2019/20

Data privacy and cyber security

WS Audiology is committed to protecting personal data of our customers and digital assets of the company.

Data privacy be informed about what data WS We engage external subject matter We strive to foster a corporate Audiology processes from and about experts to validate our cyber secu- culture of responsibility, respect and them can exercise those rights in rity setup and control, and we have trust for personal data and the priva- compliance with legal and regulatory implemented 24x7 cyber security cy rights of individuals by complying requirements. monitoring practice and processes. with all applicable laws wherever we do business. WS Audiology routinely reviews, In the reporting period, we deliv- evaluates, and revises these policies ered a general security awareness This is vital to our continued success and standards where necessary to training to more than 5,000 employ- in an increasingly regulated global address changes to the regulatory ees via our e-learning platform, and marketplace and reflective of our environment. further increased the regularity of commitment to conduct business in our phishing simulation exercises to accordance with the highest legal Cyber security educate our employees on the iden- and ethical standards. We track developments in the cyber tification and response to phishing threat landscape and update our attacks and malicious spams. WS Audiology ensures through control environment to keep abreast processes, policies, and employees of the rapidly evolving cyber risks. We continue to invest in modern that personal data are collected, security solutions to stay ahead in stored, handled, disclosed, protect- We have developed a cyber security the cyber arms race. ed, secured, and destroyed properly roadmap based on widely used secu- and according to good data protec- rity standards to provide the breadth tion practices. Individuals exercising of the control coverage. their rights to rectify, change or Governance – Cover

33 WS Audiology Business ethics and compliance Sustainability Report 2019/20

Governance and Materiality Assessment

34 Governance 35 Materiality Assessment and Stakeholder Engagement

With more than 900 R&D employees, we always aspire to be at the forefront of innovation, develop unique solutions for unmet needs, and challenge the status quo to improve people’s lives around the world. Stefan Menzl Chief Research and Development Officer Governance – Governance Governance – Governance structure

34 WS Audiology Business ethics and compliance Sustainability Report 2019/20

Governance Corporate Governance Structure Our Sustainability Committee is responsible for decision-making on sustainability topics. It consists of 6 members of Group Management, including our CEO. Shareholders Each material sustainability topic is owned by the member of Group Management of the respective global function and anchored with a dedicated manager or steering committee within that global function. Our Global Head of Sustainability is the overall sustainability program manager. Board of Directors The whole Board of Directors reviews economic, environmental, and social topics and their impacts, risks, and opportunities through a materiality as- sessment every second year. Moreover, the Board Innovation Remuneration Sustainability Independent of Directors reviews the sustainability strategy Committee Committee Committee Auditor and ESG performances twice a year. One Board of Directors member is dedicated to be responsible for economic, environmental, and social topics. This member reviews the sustainability strategy and ESG Performances once a month and reviews the sustainability report. Group Management

Organization Governance – Materiality assessment

35 WS Audiology Business ethics and compliance Sustainability Report 2019/20

Materiality Assessment and Stakeholder Engagement

We value the inputs and expectations from stakeholders on WS Audiology’s sustainability performance. Besides an ongoing dialogue with our stakeholders, we conduct materiality assessments every second year to ensure that stakeholder expectations are considered as part of our sustainability approach.

Materiality Assessment Steps

Step 1 – Identify and group Step 2 – Assess importance of each A topic is important to stakeholders sustainability topics based on sustainability topic if WS Audiology’s performance on • Sustainable Development Goals, Each sustainability topic is evaluated the topic has a significant impact on according to the importance for our the stakeholders. • Topics and future challenges for business and our stakeholders. the sector reported by peers, com- Step 3 – Prioritize material topics petitors, and NGOs, A topic is considered important to Group Management, selected em- WS Audiology if it has a direct impact ployees, customers, and suppliers • Relevant laws and regulations, on the financial performance of are engaged and provide their input the Group; if it represents risks or to the materiality assessment. The • Reporting standards, incl. GRI opportunities for WS Audiology; or if result reflects the collective input. (Global Reporting Initiative) and our business has a significant effect WSA’s Board of Directors review the SASB (Sustainability Accounting on the topic. results of the materiality assess- Standards Board). ment. Governance – Sustainability topics

36 WS Audiology Business ethics and compliance Sustainability Report 2019/20

Sustainability topics that are important to WSA and its stakeholders

Material topics Our materiality Very high assessment results Create positive impact guide the sustainability 13 1 Awareness of hearing health 2 topics we disclose in 10 Affordability this report. 3 Access to hearing care 12 8 People Customers’ main concerns are 7 5 product safety, access to hearing 4 Diversity & Inclusion care, awareness of hearing health, 11 5 Employee engagement human rights, and the supply chain 9 6 Talent attraction, development and retention code of conduct and due diligence. 7 Human rights & labor rights 16 3 2 To our own employees, innovation 15 6 Planet and product design, diversity and 1 inclusion, employee engagement, 14 4 8 Circular economy and clean production talent attraction, development and 9 Climate action retention are of high priority. 10 Environment - Innovation & Product design 17 Our suppliers put focus on prod- Business Ethics and Compliance uct safety and the supply chain 11 Business ethics & anti-corruption code of conduct and due diligence Influence on stakeholder assessments and decisions 12 Supplier code of conduct and due diligence 13 Product safety Our group management’s view High is aligned with our customers, 14 Ethical marketing employees, and suppliers. Significance of economic, environmental, and social impacts 15 Anti-trust / anti-competition

16 Data privacy & Cyber security Concerns and priorities raised by stakeholders are addressed Governance and progresses are disclosed in this report. We keep monitoring 17 Governance & accountability the topics that are not defined as material but might become more important moving forward. Governance – Our contribution to the SDGs

37 WS Audiology Business ethics and compliance Sustainability Report 2019/20

Our contribution to the SDGs

Next to the 5 sustainability goals we have selected

3 ourselves, we also strongly support the following SDG .8 targets: UN

Sustainable

5 5

. .

3

5 5

.

3 1 Development

1 1 2 2 . Goals 1 6 2 .4 SDG 3 SDG 8 SDG 12 .2 Target 3.8 Achieve universal health Target 8.5 By 2030, achieve full and Target 12.2 By 2030, achieve the sus- coverage, including financial productive employment and decent tainable management and efficient 8.8 8.7 risk protection, access to quality work for all women and men, includ- use of natural resources. 8.5 essential health-care services and ing for young people and persons access to safe, effective, quality, and with disabilities, and equal pay for Target 12.4 By 2020, achieve the en- affordable essential medicines and work of equal value. vironmentally sound management vaccines for all. of chemicals and all wastes through- Target 8.7 Take immediate and out their life cycle. effective measures to eradicate SDG 5 forced labour, end modern slavery Target 12.5 By 2030, substantially Target 5.5 Ensure women’s full and and human trafficking and secure reduce waste generation through effective participation and equal the prohibition and elimination of prevention, reduction, recycling, and opportunities for leadership at all the worst forms of child labour, reuse. levels of decision-making in political, including recruitment and use of economic, and public life. child soldiers, and by 2025 end child labour in all its forms. SDG 13 Target 13.3 Improve education, Target 8.8 Protect labour rights and awareness-raising and human and promote safe and secure working institutional capacity on climate environments for all workers, includ- change mitigation, adaptation, im- ing migrant workers, in particular pact reduction and early warning. women migrants, and those in pre- carious employment. Governance – Membership associations

38 WS Audiology Business ethics and compliance Sustainability Report 2019/20

Membership Associations

Germany Bundesverband der Hörsysteme-Industrie (BVHI) Poland TECHNOMED (Association of Medical Devices Manu- facturers) France Audition Solidarité Polish Association of Hearing Care professionals (PSPS) Partnerships for Canada Hearing Industry Association of Canada maximizing our Hungary National Association of Hearing Aid Manufacturers' impact United Kingdom The British Irish Hearing Instrument Manufacturers Representatives and Distributors Through membership Association (BIHIMA) asociation and partner- Distributors for Health Alliance ship with industry peers, Denmark Leverandørforeningen for høreapparater South Africa South African Medical Technology Industry Associa- we maximize our impact tion (SAMED) on society. Sweden Svensk Hörsel Argentina Argentine Chamber of Supplies, Implantables and Norway Melanor Medical Equipment (CADIEM)

Belgium Bemedtech Mexico Mexico City Services and Tourism Chamber of Com- merce

Netherland GAIN Organización Mexicana de la Audición S.C. (OMA)

Italy Confindustria Disposistivi Medici (Industry associa- Slovenia Chamber of commerce section of medical device cion) dealers

Danish Business Club Italy (Danish Embassy in Rome) Japan JHIMA (Japan Hearing Instruments Manufacturers Association) Portugal Associação Portuguesa de dispositivos Médicos JHIDA (Japan Hearing Instruments Dispensers (APORMED) Association) Swiss Hearing System Manufacturers (HSM) Australia Hearing Care Industry Association (HCIA)

Swiss Medtech India Hearing Aid Association India Turkey Turkish Hearing Aids Manufacturers and Importers Association Europe European Hearing Instrument Manufacturers Associa- tion (EHIMA) Russia SurdoAlliance USA Hearing Industries Association Factbook – Cover Factbook

39 WS Audiology Factbook Sustainability Report 2019/20

Factbook

41 ESG Performance 46 GRI index sheet 53 Assurance letter by third party Factbook – ESG performance

40 WS Audiology Factbook Sustainability Report 2019/20

ESG Performance

Environmental Performance

Unit Targets FY19-20 transformation) which as a result and actual site size (floor area). produce non-hazardous substances About 10-20% of the consumption Clean production or materials. is extrapolated based on estimated Hazardous waste kg 33,894 store size. These stores are mainly Non-hazardous waste - Volume of located in Japan, Australia, Hungary, Hazardous waste sent for incineration (mass burn) % 34% solid non-hazardous waste from pro- Portugal, Netherland, and UK. Hazardous waste sent for other disposal method % 66% duction activities in main production sites. The quantity of the hazardous Fuel consumption – This includes Non-hazardous waste kg 549,208 waste in Poland, Denmark, Singa- natural gas, fuel used by company Water consumption ton 24,947 pore, and Philippines are based fleet, and diesel. Company fleet that on the forwarding notes to the are owned or controlled by WSA, Energy consumption authorized vendor. The quantity of used for transportation and busi- the non-hazardous waste from site ness trips are in scope. The leased Total energy consumption MWh 61,051 in China will be included in FY20-21 cars that are paid by WSA but used Fuel consumption MWh 23,434 report and onwards. by employees for commute are not in scope. About 50% of the consump- Electricity, heating, and cooling consumption MWh 37,617 Water consumption – Overall usage tion is extrapolated based on esti- Share of renewable electricity % 100% (2025) 16% based on water billing information mated site size or fuel consumption or own counters. Water consumption by company cars. data from Philippines will be includ- ed in FY20-21 report and onwards. Electricity, heating, and cooling Accounting principles consumption – This includes elec- Hazardous waste – The hazardous waste site in the Philippines, because data were Total energy consumption – Total tricity, district heating and cooling includes both solid and liquid hazardous not available at the time. energy consumption includes fuel, consumption. waste generated in main production sites: electricity, district heating and cool- Denmark, Poland, Singapore, China, and Hazardous waste sent for incineration ing consumed on sites that WSA has Share of renewable electricity Philippines. Hazardous wastes are chemi- (mass burn) – The chemical substances in- operational control. – This is calculated as renewable cal substances are classified as hazardous cinerated or used as fuels. This includes sol- electricity consumption divided by based on the MSDS card information. The id hazardous waste (e.g. electronic/electric The energy consumption data cover total electricity consumption. quantity of the hazardous waste is based on parts containing hazardous substances). more than 1,000 WSA sites, including the forwarding notes to the authorized ven- more than 100 non-retail sites and dor. Hazardous waste data in WSA’s Annual Hazardous waste sent for other dispos- more than 900 retail shops. Signifi- Report 2020 did not include data from our al method – Neutralization processes cant amount of the data is calculated (disassembly, composting, distillation, based on actual consumption data 41 WS Audiology Factbook Sustainability Report 2019/20

Environmental Performance

Unit Targets FY19-20 GHG Protocol, WSA uses the national Standard requirements for Scope or regional emission factors for 2 reporting. Greenhouse gas (GHG) emission indirect (Scope 2) emissions defined by the following methods in each Scope 3 GHG emission – Estimat- Scope 1 GHG emission CO2-eq t Carbon 6,809 neutral­ (2025) relative geography where WSA ed for the purpose of materiality operates: assessment using the Quantis Tool, Scope 2 GHG emission (location based) CO2-eq t Carbon 13,335 neutral­ (2025) linking input data on company activ- • International Energy Agency (IEA) ities and expenditures to a combina-

Scope 2 GHG emission (market based) CO2-eq t Carbon 13,372 CO2 Emissions from Fuel Combus- tion of economic input-output and neutral­ (2025) tion process life cycle inventory data. We will conduct detailed scope 3 assess- Scope 3 GHG emission CO2-eq t Set science-­ 463,400 based target • For US sites: US EPA Emissions & ment as the next step. across all Generation Resource Integrated scopes (2023) Database (eGRID) Due to the nature of WSA’s opera- tion, only three greenhouse gases • For UK sites: Department for are considered to be released in Accounting principles Environment, Food & Rural Affairs significant quantifies for tracking;

Greenhouse gas emission – This GHG emission is extrapolated based on estimat- (DEFRA) conversion factors CO2, CH4, and N2O. Global warming inventory was compiled in accordance with ed store size. These stores are mainly locat- potentials (GWPs) are taken from the the WRI/WBCSD Greenhouse Gas (GHG) ed in Japan, Australia, Hungary, Portugal, Scope 2 GHG emission (market Intergovernmental Panel on Climate Protocol. The organizational boundary Netherland, and UK. based) – Based on the latest availa- Change (IPCC) IPCC Fifth Assess- applied to consolidate WS Audiology’s ble emission factors, published by ment Report (AR5) using 100-year emissions was the operation control ap- Scope 1 GHG emission – Activity data and the electricity supplier(s), relating values. For the current inventory the proach. No sites have been excluded from emissions include on-site stationary com- specifically to the carbon intensity of latest (AR5) values are being used. the inventory boundary over the reporting bustion of fossil fuel burning equipment the electricity procured. CO2 GWP 1, CH4 GWP 28, N2O GWP period FY19-20. (e.g., heating boilers) or process-based 265. emissions (e.g. back-up electricity genera- • Market-based emission factors for More than 1,000 WSA sites are in scope tors), company-owned or leased vehicles for the reporting year 2019-20 were FY19-20 is the base year for future based on the operation control approach. business trips. Fugitive emissions associ- collected by external consultant, reporting and target setting. The This includes more than 100 non-retail sites ated with the use of HVAC equipment are along with supporting evidence consumption and spend data of and more than 900 retail shops. Significant included here (such as Energy Attribute Certifi- FY19-20 across the group is the best amount of the emission is calculated based cates, supplier invoices, etc.) and available data after the establish- on actual consumption data and actual site Scope 2 GHG emission (location based) – checked against quality criteria ment of WS Audiology. size (floor area). About 10% of scope 1 and 2 Following the Scope 2 Guidance from the as described in the GHG Protocol

2 https://quantis-suite.com/Scope-3-Evaluator/ 42 WS Audiology Factbook Sustainability Report 2019/20

Social Performance

Creating positive impact People Accumulative Unit Targets FY19-20 Accumula- number by Unit tive targets FY19-20 FY19-20 Diversity and inclusion

Awareness Gender in Board of Directors % of female 20% (2022) 13%

Additional people that become aware of Number 500 million 1.1 million 204,000 Gender in Group Management Team % of female 30% (2025) 8% hearing loss through Shoebox­ online and (2030) offline screening Gender in Global Leadership Team % of female 35-40% (2025) 28% Gender in managerial roles % of female 45-50% (2025) 38% Accessibility Gender in all employees % of female 57% People served with hearing devices Number 20 million 3.9 million 2.2 million (2025) Unique nationality in Group Management Team Number 9

Affordability Employee engagement

People served with affordable hearing Number 4 million 725,000 390,000 Employee engagement % 80% (2025) 65% devices (2025) Talent attraction, development and retention

Total employee turnover % 12% (2025) 18% Accounting principles Total voluntary employee turnover % 6% (2025) 9% Awareness – Shoebox’ online and Affordable hearing devices – Num- offline screening tools capture the ber of people served with products Health and Safety number of screening tests com- of the basic segment and (future) pleted. Each test is counted for one lower price points are considered as Recordable work-related injuries Number 0 (target for 10 person. The accumulative number our affordable hearing devices. Basic every year) of people tested is counted since the segment is the entry-level segment Fatalities Number 0 (target for 0 launch of the Shoebox tool in May in the global WS Audiology product every year) 2020. portfolio. The number is calculated based on basic segment hearing de- Accessibility – Number of people vices sales volume and binaural rate. served is calculated based on hear- The accumulative number of people Accounting principles ing devices sales volume and binau- served with affordable hearing aids Board of Directors - the highest gov- Global Leadership Team – Consists ral rate. The accumulative number of is counted since the inception of ernance body of WS Audiology. of direct reports to CXOs of grade people served is counted since the WSA in March 2019. Directors and Above, Country GM/ inception of WSA in March 2019. Group Management Team – Con- CEO/MD and Country CFOs. sists of Group CEO, CXOs and SVPs. 43 WS Audiology Factbook Sustainability Report 2019/20

Managerial Roles – Consists of all Total voluntary employee turno- Governance managers with direct reports. ver – Total number of employees Unit Targets FY19-20 who left WS Audiology within a All employees – Consists of all em- 12-months period voluntarily / Total Supplier Code of Conduct and due diligence ployees including operators, retail running average of employees. Suppliers audited for their social, environmental Number 12 (2021) 3* employees and white collars. Only Voluntary leavers are defined as and ethical management systems and performances employees with a permanent work- employees who resigned from WS ing contract will be included. Audiology. Suppliers with significant social, environmental, or Number 0 ethical non-compliance

Unique nationality in Group Man- Recordable work-related inju- Suppliers establish improvement plans to rectify Number 0 agement Team – number of unique ries – Data is consolidated from non-compliance nationalities among all Group Man- production sites in Denmark, agement members by end of FY19- Singapore, China, and Poland. Data Business ethics & anti-corruption 20. Data in WSA’s Annual Report (8) from Philippines will be included in Substantiated breaches of corruption or bribery in- Number 0 showed year average. FY20-21 report and onwards. Any cident work-related injury that results in Employee engagement – Employee any one of the following, is consid- Engagement score is a computed ered recordable: 1) Days away from score based on the key drivers of work (lost day cases), 2) Restricted Accounting principles engagement defined by the selected work or transfer to another job, and Supplier Code of Conduct and due Conduct audits, the suppliers with engagement platform. The % is the 3) Medical treatment beyond first diligence – Number of suppliers that significant non-compliances. result of the engagement survey aid, loss of consciousness, or diag- are audited against WSA Code od that reflects how engaged the nosis as a significant injury or illness Conduct. The scope of audit includes Suppliers establish improvement employees are. The exact method by a physician or other licensed human rights, labor rights, envi- plans to rectify non-compliance of generating the % is managed by health care professional. Recordable ronment, and anti-corruption. The – Supplier with significant non-com- engagement survey vendor. injury accident data in WSA’s Annual audits are conducted by Supplier pliances are either terminated or put Report 2020 did not include data Quality Management team before on improvement plans to rectify the Total employee turnover – Total from our site in Denmark. With the FY19-20. non-compliances. number of employees who left introduction of GRI standards we WS Audiology within a 12-months have harmonized the definition of re- Suppliers with significant social, Substantiated breaches of corrup- period / Total running average of cordable injury accidents across our environmental, or ethical non-com- tion or bribery incident – Number of employees. Total running average of main manufacturing sites, resulting pliance – Based on the Code of corruption or bribery incidents that employees is defined as the average in adding 2 cases from our Denmark are substantiated. of monthly headcount numbers as at site in this sustainability report. the last day of every month. Fatality - Number of victims of fatal accident at work. Data is consolidat- ed from the whole company.

* Number of audits reduced significantly comparing to previous year (10) due to COVID-19 travel restrictions. 44 WS Audiology Factbook Sustainability Report 2019/20

Certification We have an integrated management system for quality, health and safety, and environment.

Site FY18-19 FY19-20

China ISO 14001 ISO 14001 OHSAS 18001 OHSAS 18001

Singapore ISO 14001 ISO 14001 OHSAS 18001 OHSAS 18001

Poland ISO 14001 ISO 14001 OHSAS 18001 OHSAS 18001

Denmark Not certified Not certified

Philippines ISO 14001 ISO 14001 Factbook – GRI index sheet

45 WS Audiology Factbook Sustainability Report 2019/20

GRI index sheet

Disclosure Chapter in Sustainability report Disclosure Chapter in Sustainability report Number Aspect or comments Number Aspect or comments

102-9 Supply chain p30 Organizational profile 102-10 Significant changes to the None 102-1 Name of the organization p1 ­organization and its supply chain 102-2 Activities, brands, products, and p7 102-11 Precautionary Principle or Not applicable services ­approach 102-3 Location of headquarters Lynge Denmark 102-12 External initiatives p5 102-4 Location of operations p6 102-13 Membership of associations p38 102-5 Ownership and legal form Privately held stock corporation Strategy 102-6 Markets served p6 102-14 Statement from senior p5 102-7 Scale of the organization WS Audiology Annual Report 2020 decision-maker­

102-8 Information on employees and WS Audiology Group employs 11,206 employees 102-15 Key impacts, risks, and p35-36 other workers across all entities and countries. The following break- ­opportunities down data excludes Audibene, TruHearing, Comu- nicare and Shoebox. Ethics and integrity 3 main regions - Asia Pacific, US, and EMEA, Latam and 102-16 Values, principles, standards, and WS Audiology values are being defined and will be canada. We employed 3,255 employees in APAC (99.8% norms of behavior published in the Sustainability Report covering the permanent and 0.2% temporary), 1,645 employees in financial year 2020/2021. US (99.9% permanent and 0.1% temporary) and 4,408 employees in EMEA-LA-CA (97.4% permanent and 2.6% 102-17 Mechanisms for advice and p29 temporary). ­concerns about ethics

3 main groups of employees - White Collars (69%), Manufacturing Operators (14%) and Retail Employees Governance (17%). 102-18 Governance structure p34

9,183 permanent employees, incl. 42% male and 58% 102-19 Delegating authority p34 female. 125 temporary employees, incl 62% male and 38% female. 8,582 full time employees, incl. 44% male 102-20 Executive-level responsibility for Chief Quality and Regulatory Affairs Officer is overall and 56% female. 726 part time employees, incl. 23% economic, environmental, and responsible for Sustainability (incl. economic, environ- male and 77% female. social topics mental, and social topics). This role reports directly to the President and CEO. 46 WS Audiology Factbook Sustainability Report 2019/20

Disclosure Chapter in Sustainability report Disclosure Chapter in Sustainability report Number Aspect or comments Number Aspect or comments

102-21 Consulting stakeholders on p35-36 102-29 Identifying and managing p34 ­economic, environmental, and ­economic, environmental, and social topics social­ impacts

102-22 Composition of the highest­ As of 30 September 2020, the Board of Directors con- 102-30 Effectiveness of risk management p34 ­governance body and its sisted of 8 members, including 6 independent board processes ­committees members, 1 female member. Average tenure was 17 months. 7 members of the age group of 30-60. 1 mem- 102-31 Review of economic, environ­ p34 ber of the age group above 60. No directors represent mental, and social topics other under-represented social groups. The members are competent in advising WSA on economic, environ- 102-32 Highest governance body’s role in p34 mental, and social topics, based on their current and sustainability reporting previous experience. 102-33 Communicating critical concerns p34

One member of the Board of Directors closely guides 102-34 Nature and total number of critical None WS Audiology on sustainability. concerns

102-23 Chair of the highest governance Chair of the WSA Board of Directors is independent 102-35 Remuneration policies We reward our employees in accordance with market body and not a member of WSA Group Management. benchmarks, seniority levels and role. Employee re- muneration packages are made up of different com- 102-24 Nominating and selecting the The members of the Board of Directors are chosen ponents including fixed salary, allowances, commis- highest governance body based on their experience and qualifications as well as sions, short term incentives (based on individual and diversity regarding nationality and gender mix. company performance) and long-term incentives. WS 102-25 Conflicts of interest Conflict of Interest Policy. A process has been estab- Audiology adheres to the local statutory contribution lished for the highest governance body to ensure that for each employee. conflicts of interest are avoided. Each WS Audiology employee has a duty to make business decisions in We follow a strict remuneration process where 2-level the interest of WS Audiology and not be influenced by approvals are required for salary changes (known as their own personal interests. For senior employees, the 4 eyes principle). For senior executives, salary is the disclosure will be done on an annual basis. approved via the remuneration committee (REMCO), which comprises of the selected board members. For Conflicts of interest for senior employees are dis- the Global Leadership Team (GLT), salary changes are closed to Group Management and/or the Board of approved by the Chief HR Officer and the President Directors. and CEO.

102-26 Role of highest governance body p34 WS Audiology makes use of salary grading/evolution in setting purpose, values, and to ensure that we are on par with market conditions strategy to attract the best talents in our competitive environ- ment. The grading/evaluation exercises are supported 102-27 Collective knowledge of highest No measures and based on the Mercer Salary Grading framework. governance body In addition to compensation, our employees also 102-28 Evaluating the highest governance No evaluation enjoy a wide variety of benefits including medical, body’s performance hospitalization, screenings, as well as subsidies such as hearing aids for themselves and their immediate family members. See WS Audiology Annual Report 2020 for more information. 47 WS Audiology Factbook Sustainability Report 2019/20

Disclosure Chapter in Sustainability report Disclosure Chapter in Sustainability report Number Aspect or comments Number Aspect or comments

102-36 Process for determining See 102-35 102-53 Contact point for questions Please call +45 44 35 56 00 and be directed to Sustain- ­remuneration ­regarding the report ability Team

102-37 Stakeholders’ involvement in See 102-35 102-54 Claims of reporting in accordance This report has been prepared in accordance with the ­remuneration with the GRI Standards GRI Standards: Core option

102-38 Annual total compensation ratio Data not for disclosure. 102-55 GRI content index GRI content index

102-39 Percentage increase in annual Data not for disclosure. 102-56 External assurance Deloitte is appointed to conduct the third-party as- ­total compensation ratio surance for this report. Deloitte is also the assurance provider for WSA’s financial report. See page 53 for assurance letter. Stakeholder engagement

102-40 List of stakeholder groups p35-36 GRI 205: Anti-corruption 2016

102-41 Collective bargaining agreements 15% of all employees are covered by collective bar- 103-1 Explanation of the material topic p28 gaining agreements. and its boundary

102-42 Identifying and selecting p35-36 103-2 The management approach and its p28 stakeholders­ components

102-43 Approach to stakeholder p35 103-3 Evaluation of the management For the last financial year, there has not been any sub- ­engagement approach stantiated breaches of corruption or bribery incidents.

102-44 Key topics and concerns raised p36 No reports were made to the Ombudsman on corrup- tion or bribery incidents in the last financial year. Reporting practice 205-3 Confirmed incidents of corruption Zero incidents. 102-45 Entities included in the consolidat- WS Audiology Annual Report for the financial year and actions taken ed financial statements 2019-2020, page 93-97. GRI 206: Anti-competitive behavior 2016 102-46 Defining report content and topic The reporting content and topic is defined based on boundaries materiality assessment. 103-1 Explanation of the material topic p28 and its boundary 102-47 List of material topics p36 103-2 The management approach and its p28 102-48 Restatements of information Not applicable. This is the first Sustainability Report of components WS Audiology. 103-3 Evaluation of the management For the last financial year, there has not been any sub- 102-49 Changes in reporting Not applicable. This is the first Sustainability Report of approach stantiated breaches of corruption or bribery incidents. WS Audiology.

102-50 Reporting period 1st October 2019 to 30st September 2020 No reports were made to the Ombudsman on corrup- tion or bribery incidents in the last financial year. 102-51 Date of most recent report Not applicable. This is the first Sustainability Report of WS Audiology. 206-1 Legal actions for anti-competitive No legal actions pending or completed. behavior, anti-trust, and monopoly 102-52 Reporting cycle Annually practices 48 WS Audiology Factbook Sustainability Report 2019/20

Disclosure Chapter in Sustainability report Disclosure Chapter in Sustainability report Number Aspect or comments Number Aspect or comments

306-1 Waste generation and significant The waste from our own operation includes waste GRI 302: Energy 2016 waste-related impacts from production, packaging waste from goods re- ceived, and living waste. The downstream packaging 103-1 Explanation of the material topic p24 waste is also a material topic for us. and its boundary 306-2 Management of significant WS Audiology gradually implements the concept of 103-2 The management approach and its p24 waste-related impacts lean production in the production process to control components the amount of waste. We monitor waste production 103-3 Evaluation of the management p40, p44 every month, identify abnormal data in time and take approach control measures. Qualified waste disposal suppliers We evaluate the management approach of material handles our waste legally. topics through quantified KPIs and internal audits or reviews. p26

302-1 Energy consumption within the p40 306-3 Waste generated p40 organization GRI 307: Environmental compliance 2016 GRI 305: Emissions 2016 103-1 Explanation of the material topic p24 103-1 Explanation of the material topic p26 and its boundary and its boundary 103-2 The management approach and its p24 103-2 The management approach and its p26 components components 103-3 Evaluation of the management p24, p40, p44 103-3 Evaluation of the management p41, p44 approach approach 307-1 Non-compliance with environmen- None 305-1 Direct (Scope 1) GHG emissions p41 tal laws and regulations

305-2 Energy indirect (Scope 2) GHG p41 GRI 308: Supplier environmental assessment 2016

305-3 Other indirect (Scope 3) GHG p41 103-1 Explanation of the material topic p30 emissions and its boundary

GRI 306: Waste 2020 103-2 The management approach and its p30 components 103-1 Explanation of the material topic p24 and its boundary 103-3 Evaluation of the management p43 approach 103-2 The management approach and its p24 components 308-2 Negative environmental impacts p30 in the supply chain and actions 103-3 Evaluation of the management p24, p40, p44 taken approach 49 WS Audiology Factbook Sustainability Report 2019/20

Disclosure Chapter in Sustainability report Disclosure Chapter in Sustainability report Number Aspect or comments Number Aspect or comments

403-3 Occupational health services WS Audiology has established a risk identification and GRI 401: Employment 2016 evaluation system to determine the major risks and control measures. 103-1 Explanation of the material topic p18 and its boundary 403-4 Worker participation, consultation, WS Audiology has implemented the EHS management and communication on occupa- system by establishing an EHS committee, electing/ 103-2 The management approach and its p18 tional health and safety appointing employee representatives, holding regular components EHS committee meetings, communicating EHS related 103-3 Evaluation of the management p42 information, and ensuring consultation and participa- approach tion of workers

401-1 New employee hires and employee WS Audiology hired a total of 1,012 employees in the 403-5 Worker training on occupational WS Audiology organizes a variety of training programs turnover reporting period of which 62% are female and 38% are health and safety to ensure that employees are aware of the risks and male. precautions associated with their jobs, as well as emergency response actions. The regional breakdown and age group breakdown of 403-6 Promotion of worker health In addition to the basic and mandatory medical insur- the new hires are similar to the Group distribution. ance, WS Audiology also purchases additional com- mercial insurance for its employees to provide addi- WS Audiology has a total annualized attrition rate of tional protection for their physical and mental health. 18.5% of which voluntary attrition rate stands at 9.2% over a 12 months period. A total of 1,458 employees 403-7 Prevention and mitigation of Potential fire hazards can cause significant negative had left WS Audiology over the 12 months period. occupational health and safety occupational health and safety impacts. WS Audiology impacts directly linked by business protects employees against these risks by setting up GRI 403: Occupational health and safety 2018 relationships fire alarm systems and organizing relevant training and drills. 103-1 Explanation of the material topic p20 and its boundary 403-9 Work-related injuries p42

103-2 The management approach and its p20 GRI 405: Diversity and equal opportunity 2016 components 103-1 Explanation of the material topic p19 103-3 Evaluation of the management p42 and its boundary approach 103-2 The management approach and its p19 403-1 Occupational health and safety p20 components management system 103-3 Evaluation of the management p42 403-2 Hazard identification, risk assess- WS Audiology established the SOP of "EH&S Aspects approach ment, and incident investigation Impacts and Hazards Risks Assessment" to system- atically identify and assess risks in the workplace. 405-1 Diversity of governance bodies p42. Refer to 102-22 (p46) The SOP is reviewed at least once a year, and relevant and employees training is carried out to ensure that the evaluators have the relevant competence. In addition, employees are encouraged to report Near Miss incidents at work to identify risks in a wider scope. Our SOP follows ISO 14001 and OHSAS 18001. 50 WS Audiology Factbook Sustainability Report 2019/20

Disclosure Chapter in Sustainability report Disclosure Chapter in Sustainability report Number Aspect or comments Number Aspect or comments

408-1 Operations and suppliers at signifi- Child labor and forced labor GRI 406: Non-discrimination 2016 cant risk for incidents of child labor Supplier code of conduct and due diligence 103-1 Explanation of the material topic Own operation and supply chain. and its boundary GRI 409: Forced or compulsory labor 2016

103-2 The management approach and its We are committed to non-discriminiation and we ex- 103-1 Explanation of the material topic p20 components pect our suppliers to do the same. This is included in and its boundary our company policies. Our employees can raise com- plaints through our grievance mechanism. 103-2 The management approach and its p20 components

103-3 Evaluation of the management We evaluate the management of the discrimination 103-3 Evaluation of the management p20 - human rights impact assessment planned approach topic through employee engagement surveys. Suppli- approach er’s compliance is evaluated through audits. 409-1 Operations and suppliers at signif- p20, p30 406-1 Incidents of discrimination and No legal actions or complaint registered with WS Audi- icant risk for incidents of forced or corrective actions taken ology or competent authorities through a formal pro- compulsory labor WSA UK Modern Slavery Act Statement FY19-20 cess including WS Audiology grievance mechanism. GRI 412: Human rights assessment 2016 GRI 407: Freedom of association and collective bargaining 2016 412-1 Operations that have been subject p20 103-1 Explanation of the material topic p20 to human rights reviews or impact and its boundary assessments

103-2 The management approach and its p20 412-2 Employee training on human Human rights training is planned as a part of the WS components rights policies or procedures Audiology Code of Conduct training in the financial year 2020/2021. 103-3 Evaluation of the management p20 - human rights impact assessment planned approach GRI 413: Local communities 2016 407-1 Operations and suppliers in which Freedom of association and collective bargaining. 103-1 Explanation of the material topic p21 the right to freedom of association No particular WSA site or supplier is identified as of and its boundary and collective bargaining may be significant risk of violating workers’ rights to exercise at risk freedom of association or collective bargaining. 103-2 The management approach and its p21 components GRI 408: Child labor 2016 103-3 Evaluation of the management Our communication department evaluates the quality 103-1 Explanation of the material topic p20 approach of local community engagement activities and com- and its boundary municates high quality engagement stories to encour- age other colleagues. 103-2 The management approach and its p20 components 413-2 Operations with significant actual Our operation is located in commercial buildings, with and potential negative impacts on very limited negative impact on local communities, 103-3 Evaluation of the management p20 - human rights impact assessment planned local communities i.e. no human rights (incl. land rights) violation. Water approach is sourced from municipality water systems, wastes are handled by qualified vendors, and see more about GHG emission on page 26. 51 WS Audiology Factbook Sustainability Report 2019/20

Disclosure Chapter in Sustainability report Disclosure Chapter in Sustainability report Number Aspect or comments Number Aspect or comments

GRI 414: Supplier social assessment 2016 GRI 418: Customer privacy 2016

103-1 Explanation of the material topic p30 103-1 Explanation of the material topic p32 and its boundary and its boundary

103-2 The management approach and its p30 103-2 The management approach and its p32 components components

103-3 Evaluation of the management p43 103-3 Evaluation of the management p32 approach approach

414-2 Negative social impacts in the sup- p43 418-1 Substantiated complaints concern- WS Audiology has not recorded non-compliance with ply chain and actions taken ing breaches of customer privacy data privacy regulations, and no fines have been im- and losses of customer data posed on WS Audiology. GRI 416: Customer health and safety 2016 GRI 419: Socioeconomic compliance 2016 103-1 Explanation of the material topic p31 and its boundary 103-1 Explanation of the material topic p5 and its boundary 103-2 The management approach and its p31 components 103-2 The management approach and its p8 components 103-3 Evaluation of the management p31 approach 103-3 Evaluation of the management p40-44 approach 416-1 Assessment of the health and 100% safety impacts of product and ser- 419-1 Non-compliance with laws and WS Audiology has not recorded non-compliance with vice categories regulations in the social and eco- regulations in the social and economic area, and no nomic area fines have been imposed on WS Audiology. GRI 417: Marketing and labeling 2016

103-1 Explanation of the material topic p31 and its boundary

103-2 The management approach and its p31 components

103-3 Evaluation of the management p31 approach

417-2 Incidents of non-compliance con- p31 cerning product and service infor- mation and labeling Factbook – Assurance

52 WS Audiology Factbook Sustainability Report 2019/20

Independent Auditor’s Assurance Report

To the Management Management’s responsibility under Danish audit regulation to Consequently, the level of assurance The Management of WS Audiology is obtain limited assurance about our obtained in a limited assurance and stakeholders of WS responsible for collecting, analysing, conclusion. engagement is substantially lower Audiology aggregating and presenting the than the assurance that would have information in the Report, ensur- Deloitte Statsautoriseret Revision- been obtained had we performed a We have reviewed WS Audiology’s ing that data is free from material spartnerselskab is subject to Inter- reasonable assurance engagement. Sustainability Report 2019/20 (‘the misstatement, whether due to fraud national Standard on Quality Control Considering the risk of material Report’), covering global activities or error. WS Audiology’s non-finan- (ISQC) 1 and, accordingly, applies a misstatement, we planned and per- from 1 October 2019 to 30 Septem- cial accounting principles contain comprehensive quality control sys- formed our work to obtain all infor- ber 2020, to provide limited assur- Management’s defined reporting tem, including documented policies mation and explanations necessary ance that: scope for each data type. The criteria and procedures regarding compli- to support our conclusion. for the accounting principles can be ance with ethical requirements, pro- • The ESG performance data on found on page 40-44 of the Report. fessional standards and applicable We performed our review from April page 40-44 in the Report have legal and regulatory requirements. to June 2021. Our work has includ- been stated in accordance with the Auditor’s responsibility ed interviews with key functions in criteria defined by WS Audiology’s Our responsibility is to express a lim- We have complied with the inde- WS Audiology, inquiries regarding accounting principles. ited assurance conclusion on the ESG pendence and other ethical re- procedures and methods to ensure performance data on page 40-44 quirements of the Code of Ethics that selected ESG data and infor- • The Report has been prepared in in the Report. Furthermore, our re- for Professional Accountants issued mation have been incorporated accordance with the Global Re- sponsibility is to review whether WS by FSR-Danish Auditors (Code of in accordance with the account- porting Initiative (GRI) Reporting Audiology has aligned its reporting Ethics for Professional Accountants), ing principles. We have assessed Standards (Core Level). with the Global Reporting Initiative which are based on the fundamental processes, systems and controls (GRI) Reporting Standards Core principles of integrity, objectivity, for gathering, consolidating and • The Report has been prepared in Level and the UN Global Compact professional competence and due aggregating ESG data at Group level, accordance with the requirements Communication on Progress Policy. care, confidentiality and professional and we have performed analytical of the UN Global Compact Com- We have conducted our work in ac- behaviour. review procedures and tested ESG munication on Progress Policy. cordance with ISAE 3000, Assurance data prepared at Group level against Engagements Other than Audits or A limited assurance engagement underlying documentation. We have We express a conclusion providing Reviews of Historical Financial Infor- is substantially less in scope than a reviewed the reported data (some limited assurance. mation, and additional requirements reasonable assurance engagement. measured, some calculated and 53 WS Audiology Factbook Sustainability Report 2019/20

some estimated) as well as evaluated quality as well as the GRI Standards Conclusion amount of estimated data in fu- and given feedback on the reliability disclosure requirements. Based on our work, nothing has ture reports. and validity of the underlying sourc- come to our attention causing us not es, especially of estimated data. We We have not performed site visits, to believe that: • the Report has been prepared in have evaluated the overall pres- nor have we performed any assur- accordance with the Global Re- entation of the Report, including the ance procedures on economic or • the ESG performance data subject porting Initiative (GRI) Reporting consistency of information. Finally, financial data or on certain data to our review have been stated Standards (Core Level). we have reviewed the Report for models supplied to WS Audiology in accordance with the criteria adherence to the requirements of (e.g. for scope 3 emissions) or on defined in the accounting princi- • the Report has been prepared in the UN Global Compact Communica- forward-looking statements such as ples. Certain environmental data accordance with the requirements tion on Progress Policy, and we have targets and expectations. Conse- are based on estimates, as stated of the UN Global Compact Com- reviewed the Report for adherence quently, we draw no conclusion on in the Report, and the company munication on Progress Policy. to the GRI principles for defining these statements. is working towards reducing the report content and ensuring report

Copenhagen, 29th June 2021

Deloitte Statsautoriseret Revisionspartnerselskab Business Registration No. 33 96 35 56

Nikolaj Thomsen Helena Barton State-Authorised Public Accountant Partner, ESG and Lead Reviewer MNE-no. mne33276 To become a true leader, we must also lead in sustainability. We have set the objectives to become the most environmentally friendly hearing aid company, the most diverse hearing aid company and the hearing aid company that serves the most people, doing more than anyone else to realize our purpose.

Eric Bernard President and CEO

WS Audiology wsa.com Nymøllevej 6, 3540 Lynge Phone: +45 44 35 56 00 Denmark Phone: +65 6370 9666