Sustainability
Report23
24

Table of Contents

4

Insights from the Chairman and the CEO

6Highlights

7

What we do and where we operate

10

Business purpose and sustainability strategy
The importance of sustainability for our business strategy and purpose
Sustainability governance and accountability
Our approach
Governance structure
Accountability
Sustainability policies

16

Sustainability priority areas
Sustainability double materiality
Priority areas

22 Transitioning to a sustainable future
Climate action and decarbonization journey
Waste reduction
Innovation and circular economy

34 Working responsibly
Culture and values
Investing in our people
Diversity, equity and inclusion
Health, safety and wellbeing of employees

44 Fostering responsible business practices
Business ethics
Human rights and sustainable supply chains

50 Appendices
Appendix 1: RBI content index
Appendix 2: LEM ESG rating summary
Appendix 3: Summary data table
Appendix 4: List of acronymes

3

LEM Sustainability Report 23 | 24

Insights from the Chairman
and the CEO

Andreas Hürlimann
Chairman of the Board of Directors

Frank Rehfeld
Chief Executive Officer

Dear Stakeholders,
At LEM, we believe it is vital that all
our stakeholders are able to forma clear view of how a company isaddressing diverse social and environmental challenges: put simply,
is LEM part of the solution or part ofthe problem? Thus, we are delighted
and proud to present our first standalone Sustainability Report.

LEM Sustainability Report 23 | 24

4

We hope that what follows demonstrates how we are contributing tominimizing our own impact – for example, by reducing our direct andindirect carbon emissions. At thesame time and perhaps more importantly, this report explains how ourbusiness is in a unique position: we
facilitate the enormous changes

We enable the enor“mouschanges needed

to turn aspirations fora low carbon future into
reality.”needed to turn aspirations for a low
carbon future into reality as a wide
range of applications we are serving –electric vehicles, charging stations,renewable energy, trains – rely on
our innovative components to monitor electricity consumption andoptimize performance. This will alsoenhance our employer brand, making LEM a destination of choice forthose who want to contribute to amore sustainable world.
What we have achieved so far is dueto the unfailing commitment andskills of colleagues across the business. While we should celebrate
the progress made, it’s important toacknowledge we are at a relatively
early stage of the journey and still
have much to learn if we are to realize our ambitious objectives. That
is why we must tap into the knowledge, insights and requirements ofour suppliers, customers and otherstakeholders. Open and honest dialogue will foster increasing collaboration and deliver mutual benefits for
all parties.

At the same time, we have to ensurethat internal policies, structuresand behaviors are aligned with ourplans. The Board of Directors now
has oversight on our sustainability
journey, linking sustainability to our
corporate strategy. Finally, since2023, our Executive Management
and senior leaders have a portionof their short-term incentive linked
to the progress we make towards
our Greenhouse Gas (GHG) emissions reduction targets.
We invite you to read this report,
cast a critical eye over our progress
and plans for the future and form
your own view of how we have performed. We very much welcome
your feedback.

5

LEM Sustainability Report 23 | 24

Highlights

This section provides a snapshot of our highlights in FY 2023/24. For a morecomprehensive view of our progress, please refer to our data table in appendix 3.

49% 51%
FemalesMales

New Labor andHuman Rights Policy
Refreshed Code of Conduct
Policies to match oursustainability ambitions

1
1,808
Employees

Working instand alone
sustainability report

17 countries

87%

Ambitious
emission
reductioncommitments:

LEM Sustainability Report 23 | 24st6

of our own sites
using renewableelectricity

New employee
whistleblowing
process

90% 90%reduction in Scope 1 and 2
emissions by 2025

reduction in Scope 3
emissions by 2040

What we do andwhere we operate

LEM is a Swiss-based group specializing
in current sensors for over 50 years. We
work at the forefront of mega trends suchas electrification, decarbonization, renewable energies, automation and (e-)mobility. With innovative electrical solutions,
we are helping our customers and society
accelerate the transition to a more sustainable future.

LEM is a pure-play producer of current sensors withyearly sales of over CHF 400 million. Our team of
1,808 employees is spread over 17 countries. Our
production sites, located in Beijing, Sofia, Penang,Tokyo and Geneva, create innovative products forour global customers. LEM engineering teams arelocated in Geneva, Lyon, Beijing, Shanghai and Munich. Our global R&D presence ensures that we areclose to our customers and that we benefit from theinternational talent pool to grow our teams. Please
visit our website at www.lem.com to find out more.

LEM has built a strong reputation for manufacturing
the largest range of high quality, precise and reliable current sensors for a wide range of applications
such as:
1. Automotive (battery management, motor control)
2. Automation (tooling machines, robotics,
elevators, HVAC)
3. Renewable energy (solar and wind inverters)
4. Energy distribution and high precision(charging stations, test benches, MRI)
5. Track (traction, trackside)

We have split our permanent workforce into twogroups: direct labor (DL) which includes production
line operators and indirect labor (IDL) which includes everyone else. DL and IDL counts respectively for 40% and 60% of our employees. Our
workforce gender split is 51% male and 49% female. Please see the map showing our different locations on the next page.

7

LEM Sustainability Report 23 | 24

Leading the world inelectrical measurement

LEM headquarters
Geneva, Switzerland

PR
OD
DUCTI
ON
N || RR&
D || SALSALESPROU CTI O
&D
ES
|
|
AG
EN
TS
DI
STRI
BUTO
AG E NTS DISTR IB UTO RS

A leading company in electrical measurement, LEM engineers the best solutions forenergy and mobility, ensuring that ourcustomers, systems are optimized, reliable
and safe.

LEM Sustainability Report 23 | 24

8

EMEA

Geneva, Switzerland
Frankfurt, Germany
Vienna, Austria
Brussels, Belgium
Randers, Denmark
Paris, France
Padova, Italy
Skelmersdale, UK
Lyon, France
Sofia, Bulgaria
CHI NA

BeijingShanghai
Shenzhen
Xian
Hefei
Taipei, Taiwan
Wuhan
AMERI CAS

Milwaukee, Wisconsin
Detroit, Michigan
Bridgewater, New Jersey
Columbia, South Carolina
Los Angeles, California
REST OF ASI A

Pune, India
Seoul, South Korea
Tokyo, Japan
Penang, Malaysia

New production facility
Penang, Malaysia

Our 1,808 people in 17 countries transform
technology potential into powerful solutions
and support our customers on a global scale.
LEM has expanded its production capacities
in the financial year 2023/24 with a new
production facility in Penang, Malaysia.

The new production facility enables LEM to
supply the Asian markets as well as the US andEurope from Asia. The new plant complements
the global network of existing production
facilities in Geneva, Beijing, Sofia and Tokyo.

9

LEM Sustainability Report 23 | 24

Business
purpose andsustainability
strategyThe importance ofsustainability for ourbusiness strategy
and purpose
At LEM, we are proudly united behind one clear purpose: we help our customers and society accelerate
the transition to a sustainable future. This purpose is
not new to us, nor a nebulous dream; it is our company’s raison d'être and is central to our strategy andfuture growth plan. LEM’s current sensors play a keyrole in the energy and mobility transition underway
and, with the megatrends of decarbonization andelectrification accelerating, we are in a unique position to capture further growth.
How does our strategy support our purpose to help
customers and society cut carbon emissions? The
answer is simple:
1.		Our product strategy concentrates on technology to reduce carbon emissions and promote energy efficiency in heritage industries. Our current
sensors are found in low carbon industries andtechnologies that are critical to a sustainable future. These include electric vehicles (EVs) and renewable energy technologies such as solar panels, wind turbines and heat pumps. We are working to expand those businesses and develop further new energy and mobility applications such as
intelligent EV charging, renewable energy storage
plants and robotics, hydrogen electrolysis andsmart cities. We are proud to help many industries
to reduce carbon emissions by building current
sensors that help our customers understand andmonitor their energy usage. This drives energy efficiency, including in energy intensive industries
and industrial activities, such as traditional automotives and industry welding.
2. We recruit and nurture innovative minds and collaborate with customers and universities to innovate. We attract and develop the best global talent, working at the forefront of megatrends, suchas electrification, decarbonization, renewableenergies, automation and (e-)mobility. We initiate
partnerships with science, technology, engineering and mathematics (STEM) universities to attract

young and emerging talents who will undoubtedly
contribute to the emergence of new ideas andhelp us accelerate our product offering.
3.		We build relationships with industry to implementand distribute our technologies as widely as possible. We do this on two fronts: one by working
with technology partners to leverage on existingor develop complimentary building blocks to oursystems, especially for complex and miniaturized
systems; and two by working closely with ourcustomers to offer them solutions that best fit
their product roadmap expectations.
4.		 We invest in next generation applications. We invest considerable financial means into the research and development of new technologies andproducts. Our R&D expenses represent 8.3% of
our FY 2023/24 turnover. From mobility to energy efficiency, public safety and security, LEM iscapturing opportunities in new and accelerating
markets such as AC measurement for smart grids.
We are pioneering the miniaturization of our products to reduce product size and weight which willbring further energy savings.
The next frontier is to ensure that our own operationsand value chain, processes and targets support our
purpose. LEM is committed to leading by example andrunning our business sustainably and responsibly. We
have set a target to become net zero by 2025 within
our own operations (Scope 1 and 2 market-based).
We have moved to a state-of-the-art new head officein Geneva, which received a Minergie label, and we
reduced our emissions by more than 50% comparedto our former offices. All our existing production sites
are certified ISO14001 and our newest plant in Penang, Malaysia, will soon be ISO14001 certified and receive certification from the Green Building Index for
innovative design. We have invested in renewable
technologies, installing solar panels on the roofs ofour key productions sites and in Energy Attribute Certificates (EACs). Recognizing that the bulk of ourgreenhouse gas (GHG) emissions originate from ourvalue chain, we have also set a target to be net zeroby 2040 across our value chain. For this, we need aconcerted effort, especially in our supply chain, to reduce emissions further and achieve our net zero target (see climate change section for more information).

11

LEM Sustainability Report 23 | 24

Business purpose andsustainability strategy

Our dedication to decarbonization will not be detrimental to other environmental and social concerns.
We acknowledge the significance of tackling a diverse range of environmental and social issues beyond just carbon reduction. While our sensors arecrafted from raw materials and metals, some ofwhich are procured through resource-intensive
channels that may raise human rights concerns, weunderstand the need to improve their circularity andto reduce our ecological footprint throughout their
entire lifespan. By closely collaborating with local
partners, we prioritize waste reduction, uphold human rights standards and strive to mitigate environmental impacts. Our commitment is one of accountability and integrity, as we pursue a future characterized by minimal carbon emissions.

“ As Chief People andSustainability Officer, I am
delighted to share our firststand-alone sustainability
report. Sustainability is at
the core of why LEM exists. Our business purpose
is clear, we want to help
our customers and society
accelerate the transition toa sustainable future. This
indicates our clear commitment to be at the forefrontof developing high quality,
innovative and low carbon
technologies for our customers. It is a journey anda challenge but one that
we are excited about andready to take on.

”

LEM Sustainability Report 23 | 24

12

Rodolphe Boschet
Chief People and Sustainability Officer

Sustainability governanceand accountability

LEM sustainability governance structure
Flow of information

Board of Directors
Strategy Committee

Oversight, delegate

Executive Committee
Chief People and Sustainability Officer

Head of Sustainability

Green Committee Exchange(Chaired by Head of Sustainability)
Entities represented:
Green Committee Leaders
Beijing, China Production
Geneva, Switzerland Production
Lyon, France R&D Center
Penang, Malaysia Production
Sofia, Bulgaria Production
Tokyo, Japan Production

Sustainability Committee(Chaired by Head of Sustainability)
Functions represented:
Communications and Investor Relations
Facility
Global Product Management
HR
IT
Manufacturing
Purchasing
Quality
R&D
Sales
Supply Chain

Our approach
Sustainability-related regulation and expectations
continue to evolve rapidly, reaching all areas of LEM’sbusiness. Therefore, ensuring the appropriate governance is in place is key to delivering on our sustainability commitments. Effective oversight andmanagement of sustainability at LEM is essential to
our sustainable success. To address these evolving
regulations and expectations Rodolphe Boschet
and Quentin Piat were appointed to sustainability-related roles as Chief People and Sustainability Officer
and Head of Sustainability respectively.

Governance structure
Our sustainability structure starts on the ground with
six local green committees across our production
and R&D sites. These committees meet once permonth and are made up of volunteers passionate
about sustainability; they enable local decision-making. The local committees are led by Green Committee Leaders who meet once per quarter with theHead of Sustainability at the Green Committee Exchange to share best practice and ideas betweensites.

13

LEM Sustainability Report 23 | 24

Sustainability governanceand accountability

The Sustainability Committee is a separate committee, where the global functional leads meet with theHead of Sustainability. The departments that are represented include: Communications and Investor Relations, Facility, Global Product Management, HR, IT,
Manufacturing, Purchasing, Quality, R&D, Sales andSupply Chain. At this monthly meeting, chaired by
the Head of Sustainability, attendees exchange andcoordinate on sustainability-related functional topics, compile and review implementation results andprogress and cover pre-agreed priority topics for
the Strategy Committee.
Centrally, the LEM Executive Committee, under thelead of the Chief People and Sustainability Officer, isin charge of defining the strategy and our short andlong term priorities. This strategy and the progress towards our goals is regularly reviewed by the Board of
Directors (BoD). Since February 2024, LEM’s Strategy Committee has the formal responsibility to review
and submit to the BoD for approval LEM’s sustainability strategy. This Strategy Committee is composed ofthree people, is chaired by our Chairman of the Boardof Directors and meets several times per year.

Accountability
The Board oversees the success of our sustainability strategy and the Executive Committee is responsible for developing and delivering our sustainability
strategy. In 2023 we established a sustainability department which is working closely with representatives from all functions to build action plans andtrack our progress. The Head of Sustainability is responsible for the day-to-day delivery of our sustainability roadmap. For the first time, in 2023, we introduced a Scope 1 and 2 reduction target in Executive
Management and senior leaders' short-term incentives.
As we are in the early stage of our journey, we currently monitor our ESG and sustainability performance using a high-level roadmap and an internal
dashboard with chosen monthly, quarterly and annual indicators.
Sustainability policies
We have introduced new policies and updated ourexisting policies to support our sustainability agenda. These can be found below in our policy table:

Policies

Coverage summary

Relevant stakeholder groups

Conflict Mineral Statement

Sets out our implemented procedures designed to demonstrate that the metals our products contain are sourced inaccordance with this policy. We require our suppliers to verify
and assure in writing there are no conflict minerals in our
supply chain.

– Our customers– Our suppliers– Governments and wider society

In accordance with our Group Environmental Policy, as adownstream user, commits to be in compliance with European
End-of life vehicles (ELV) directive 2000/53/EC.

– Our employees– Our customers– Our suppliers– Governments and wider society

Outlines the behavior LEM expects from every stakeholder
around the world guiding our responsibilities to society. Italigns with the principles of the United Nations Global
Compact (UNGC), global environmental standards and ourcore corporate values.

– Our employees– Governments and wider society

Articulates our dedication to enhanced environmental
protection and performance within our Business, with growing
attention to the design of products with lower lifecycle carbon
footprint – applies to all LEM entities and employees.

– Our employees– Our customers– Our suppliers– Governments and wider society

Publicly available on our website

European End-of Life Vehicles
Statement of Compliance
Publicly available on our website

Group Code of Conduct
Publicly available on our website

Group Environmental Policy
Publicly available on our website

LEM Sustainability Report 23 | 24

14

Group Health and Safety Policy

Applies to all prospective and current employees of thecompany as well as external people on any LEM site (e.g.,
volunteers, contractors, consultants), outlining the expectations and responsibilities to contribute to a healthy and safe
workplace.

– Our employees– Governments and wider society

Commitment to the Universal Declaration of Human Rights,
the OECD Guidelines for Multinational Enterprises and the ILO
Core Conventions on Labor Standard – applies to all LEM
Group including its different subsidiaries, affiliates, establishments worldwide. This policy reinforces our position withregards to child labor. In addition, we expect and support our
upstream and downstream supply chain partners, suppliers
and third-party contractors (consultants, temporary workers,
volunteers working on any LEM sites) to comply with theprinciples set forth in this Policy.

– Our employees– Governments and wider society

Sets out for all LEM employees, our commitments and what
we must do to achieve them by continuously improving our
product performances and customer service level as well as
by encouraging innovation and access to new technologies.

– Our customers– Our employees

In accordance with our Group Environmental Policy, as adownstream user, commits to be in compliance with REACH
obligations.

– Our employees– Our customers– Our suppliers– Governments and wider society

Sets out the expected requirements and expectations for all
suppliers – direct and indirect, contractors and vendors to
LEM worldwide who may be customer-directed suppliers,
and who provide services, components, parts, assemblies or
sub-assemblies which are used to produce LEM product.

– Our suppliers– Governments and wider society

Ensures that LEM business is handled in accordance with
LEM Code of Conduct and applicable laws against bribery andcorruption – applies to any LEM employee, in any country
where LEM operates and does business and to any transaction agreed by LEM.

– Our employees– Governments and wider society

Enforces LEM Disclosure and Insider Trading Policy – applied
to all directors, officers and employees of LEM and any person
who is considered to have Insider Information about LEM or
its business.

– Our employees

Group Disclosure andInsider Trading Policy
Internal

Ensures full compliance of LEM with its legal obligations
as a company listed on the SIX Swiss Exchange – applies to
LEM insiders.

– Our employees

Group Employee Privacy Policy

Sets out the Where, What, Why and How elements of dataprocessing for all LEM Entities and LEM Employees within the
LEM Group.

– Our employees

Defines the whistleblowing and investigation policy for LEM
and all of its subsidiaries, offices and sites worldwide. It
includes all members of the Board of Directors, executives,
officers and employees, irrespective of their location. Any
third party may report a potential breach to the LEM’s Codeof Conduct or to any applicable law and regulation pursuant
to the terms of this Policy.

– Our employees– Governments and wider society

Publicly available on our website

Group Labor and Human Rights Policy
Publicly available on our website

Group Quality Policy
Publicly available on our website

REACH Compliance Statement
Publicly available on our website

Supplier General Requirements Manual
Publicly available on our website

Group Anti-Bribery andAnti-Corruption Policy
Internal

Group Disclosure andInsider Trading Policy Enforcement
Internal

Internal

Group Whistleblowing andInvestigation Policy
Internal

15

LEM Sustainability Report 23 | 24

Sustainability
priority areas

Sustainability double materiality
In early 2024, we completed our first Double Materiality Assessment (DMA). This involved an in-depth
assessment of LEM’s impacts on people and the environment as well as the financial risks and opportunities associated with sustainability. From climatechange to human rights, we scrutinized every relevant sustainability topic across our entire operationsand value chain including our governance.

2.
3.

porting Standards (ESRS) sustainability matters
list, sector-specific topics from Sustainability
Accounting Standards Board (SASB), existing
peers’ DMA results, internal documentation anddiscussion as well as rating agencies’ results;
reduced the long-list to a more manageable
short-list;
defined the impacts, risks and opportunities
associated with those matters through several
workshops with relevant internal experts;
evaluated and prioritized the impacts, risks andopportunities from the two perspectives: impact and the financial risks and opportunities
that the matters present to LEM, which allowed
us to fix our materiality threshold; and finally,
validated the results with internal stakeholders. Key internal stakeholders, including subject-matter experts, were consulted throughout
the different steps of the process to ensure awide range of perspectives.

The goal was clear: to identify the most relevant
sustainability topics for LEM and guide our reporting for compliance with the Swiss Responsible Business Initiative Due Diligence and Transparency Ordinance (RBI-DDTrO) and making progress towards
compliance with the EU Corporate Sustainability Reporting Directive (EU CSRD). But we did not stop
there. We have capitalized on this assessment byusing the results to redefine our sustainability priority areas.

4.

The assessment was done in five stages. We:
1. identified a long-list of potentially material matters gathered from European Sustainability Re-

The result is this comprehensive matrix of the mostmaterial matters. We have identified eight material
topics represented in the below matrix and table.

5.

Eight material topics
Environment

Climatechange

Waste

Circulareconomy –resource
inflows andoutflows

SocialConsumer Own
Business
information workforce – ethics
working
conditions

Governance

Conflict
minerals*Childlabor**Mandatory as per Swiss law

17

LEM Sustainability Report 23 | 24

Sustainability
priority areas

Priority areas
The most relevant sustainability topics based on ourdouble materiality assessment are summarized in
the table on the next page. These have become oursustainability strategic priorities. The impacts (positive and negative), risks and opportunities were

defined and assessed by our internal subject matter
experts. The rating was then harmonized to ensure
consistency across all material topics. As shown inthe matrix below, the impact materiality threshold
was set at 3 out of 5 and the financial materiality
threshold was set at 2.90 out of 5.

Double Materiality Assessment (DMA)
DMA results highlighting the material topics for the company as a whole, with a rating aligned on the Entreprise Risk Management
system.
4.00

Climate change

3.50
Own
workforce –working
conditions

Financial materiality

3.00

2.50
Workers in thevalue chain –working
conditions

2.00

Energymanagement
ConsumersafetyChildlabor*

Consumer
information
Circular economy– resource inflows
and outflows

Conflict
minerals*

Own workforce – equal treatment
and opportunities for all
Waste

Pollutionof air1.50

Affected communities

Own workforce –other workrelated
rightsBusiness ethics

1.00
Water

Pollution of water

0.50

0.00

Workers in thevalue chain –other workrelated rights
1.50

2.00

2.50

Pollution ofsubstances ofvery high concern
Workers in the value chain – equal
treatment and opportunities for all
3.00

3.50

4.00

Impact materiality
Below materiality
threshold*Mandatory as per Swiss law

LEM Sustainability Report 23 | 24

18

Materiality area with the following threshold:impact materiality: 3.0, financial materiality: 2.9

Positive impact,
opportunity

Negative
impact, risk

Material topic

Climate change

Material
negative
impactMaterial
positive
impactMaterial
risk

Material
opportunity

Description of the impacts,
risks and opportunities

Page
reference

Negative impact on global warming
through energy use and Scope 3
GHG emissions in the supply chain.
The biggest impact drivers in LEM's
Scope 3 emissions are thepurchased products and upstream
and downstream transportation.

23–27

Positive impact on global warming
through Scope 3 GHG emissions
from product use. Due to the factthat by using our products, theemissions and energy consumption
will be reduced.
Opportunity to implement thesecriteria into the Procurement Risk
Assessment to make good choices
upfront and anticipate risks.
Waste

Negative impact on the environment
through waste generated inoperations, taking into accountefforts to minimize waste.

28–29

Circular economy –resource inflows
and outflows

Opportunity to (timely) develop anddeploy products, solutions andtechnologies that meet changing
customer demand for moresustainable products (productlifetime, use of scarce- andnon-renewable materials in productdesign, carbon-neutral products).

30–33

Consumer
information

Positive impact on consumers
through innovative electricalsolutions that can help consumers
and society accelerate the transition
to a sustainable future (sensors andsolutions play a key role in thefollowing six areas: drives, power
conversion, electrical safety, battery
management, energy monitoring andenergy metering).

30–33

19

LEM Sustainability Report 23 | 24

Sustainability
priority areas

Material topic

Material
negative
impactMaterial
positive
impactMaterial
risk

Material
opportunity

Description of the impacts,
risks and opportunities

Page
reference

Own workforce –working conditions

Opportunities in employee engagement and young talent attraction andretention supporting businessgrowth with brand image of thecompany.

36–38

Business ethics

Positive impact on society,employees, customers, shareholders
and suppliers through behaviors that
support transparent and sustainablebusiness practices to the benefit of
all stakeholders, taking into account(effectiveness of) whistleblowing
protection, policies, training andother initiatives that promote ethicalbusiness conduct.

45–47

Conflict minerals

Negative impact in potentiallycontributing to conflict throughLEM’s mineral sourcing practices.
This contribution can lead to sourcesof conflict, human rights abuses andinsecurity.

48–49(Reputational) risk of financial loss ordamage caused by failure to comply
with RBI-DDTrO regulations.
Child labor

Negative impact on children throughpotential failure to address this issue
through the sourcing of products
and services. Failure to have robust
due diligence processes andprocedures in place could increase
the risk of LEM’s operations andprocurement financing suppliers
from different tiers located incountries where the risk of childlabor is high.
(Reputational) risk of financial loss ordamage caused by failure to comply
with RBI-DDTrO regulations.

LEM Sustainability Report 23 | 24

20

48–49

In summary, the double materiality assessment hashelped us analyze our impact on society and the environment across our operations, value chain and into the future. It has helped us formulate a more impactful strategy centred on emissions reduction,
waste management, circular economy, innovation
for consumers, business ethics, our own workforce
working conditions and supply chain human rights
issues (conflict minerals and child labor) – the most
relevant areas to our business. Although several topics did not exceed the materiality thresholds, it isworth noting that we are taking action to track andaddress those areas that are deemed to be either
emerging topics or strategically relevant for ourbusiness.

For the DMA and each material topic, the next steps,
to be conducted in 2024/2025, are:1.	complete the DMA to make it fully CSRD aligned,
collecting insights from external stakeholders,2.	ensure that we have adequate data collection
systems and KPIs in place to report on the material matters under Swiss RBI-DDTrO and EU CSRD,
3.	produce tactical roadmaps for each area, detailing the actions we will take to minimize negative
impacts and financial risks, while maximizing positive impacts and competitive advantage,
4.	assess the action implemented using the abovementioned identified KPIs and take corrective
measures.

“ As the recently appointed Head

Quentin Piat
Head of Sustainabilityof Sustainability, I am very proudof what we have achieved overthe last year. It was a mix of very
concrete actions to improve oursustainability posture and setting
the solid foundations for oursustainability strategy with our
first ever double materiality
assessment and report. Working
with colleagues across the business will be my focus to embed
our sustainability strategy into
day-to-day operations.

”

21

LEM Sustainability Report 23 | 24

Transitioning
to a sustainable
futureClimate
action anddecarbonization
journey
Climate change is one of the biggest challenges of
our time, so enabling and accelerating the transition
to a low carbon future that will limit global warming
to 1.5C underpins our business strategy. Taking boldclimate action is key to limit the physical and transitional impacts of climate change, which is essential
for the future success of our business. We also
know we cannot do it alone, so we need to work
closely with our customers, suppliers and business
partners to ensure we all take this journey together.
Impacts, risks and opportunities
The LEM board and leadership recognize that urgent action is required to significantly reduce therisks associated with climate change for LEM andthe negative impacts LEM has on climate. At thesame time, we have also identified strong opportunities for us to position ourselves as enablers of thetransition to low carbon technologies in the industries we work with. This is why climate change has
been identified as one of our material topics.
We have two potential climate-related risks: the firstone is linked to disruptions in production lines, damage to assets, supply chain disruption caused by adverse weather events; the second is related to ourbusiness’ inability to develop and deploy products,
solutions and technologies that meet changing customer demand for more sustainable products. Moreover, as we aim to position ourselves as a driver of decarbonization, we also see opportunities for us to takeaction. With the accelerating trend towards electrification of mobility and infrastructure and the quest ofenergy efficiency, there is an opportunity for our business to flourish when we continue to focus on developing those new solutions. We also have an opportunity to be part of the solution and drive decarbonization across the sectors by developing innovative andefficient solutions that will reduce GHG emissions.
Following the risks and opportunities associatedwith climate, our double materiality assessment also
examined our impact. The vast majority of our emis-

sions are associated with our upstream and downstream value chain emissions (Scope 3), this is where
we have our biggest negative impact.
Policies
We have a group environmental policy that underpins
our commitment to monitor and control energy use
and GHG emissions across our own operations and ourvalue chain (see policy table on pages 14–15). It also
commits LEM to actively listening to customers who
rely on our contribution to their sustainability efforts.
We also have a Group Environment Management
System (EMS) manual, which highlights our vision for
a common approach to our EMS, as well as a group
Product Environment Profile (see case study on
page 32). To communicate our minimum requirements to suppliers we also have a group Code of
Conduct and a Supplier General Requirements Manual (see policy table on pages 14–15).
Commitments, targets and measures
A key component of our plan to decarbonize is ourcommitment to reach net zero emissions by FY 2025
in our own operations (Scope 1 and 2 market-based)
and by FY 2040 for our value chain (Scope 3). Our
targets are to:– Reduce our Scope 1 and 2 (market-based)emissions by 90% by 2025 from a 2023 baseline.
– Reduce our Scope 3 emissions by 90% by 2040
from a 2023 baseline.
In 2023, one of the main areas of focus was to switch
our own operations sites to renewable energy, where
possible. Most sites buy renewable energy directlyfrom suppliers and for locations (China) where this is
not possible, we purchased Energy Attribute Certificates (EACs) equating to 3.5 MWh of renewableelectricity. Through our investments in EACs and ourexisting renewable tariffs, we have reached 87% renewable electricity across our business compared to2022 where we only had 37%. Our production sites
in Geneva, Sofia and Beijing are now using 100% renewable electricity, as well as our warehouse in Germany. Moreover, all our main production sites (Geneva, Sofia, Penang and recently Beijing) also support
the generation of renewable electricity via onsite solar panels where generated electricity is either usedon site or fed into the grid.

23

LEM Sustainability Report 23 | 24

Transitioning
to a sustainable future

We have also focused on adopting energy efficiency technologies, for example, we have moved to our
new head office in Geneva, in April 2022, which received a Minergie label. At this site, we reduced ouremissions by more than 50% compared to our former offices. All our production sites are certified
ISO14001 and our newest plant in Penang, Malaysia,
will soon be certified ISO14001 and certified by theGreen Building Index for innovative design.

For example, size is always a factor due to the limited space within an Electric Vehicle (EV). Also, allcomponents need to be of minimal size to make avehicle as light as possible to minimize energy usage and extend the distances EVs can drive between charges. One good example of our drive to
miniaturization is our success in optimizing power
consumption in our magnetic sensor product groups(see case study on page 33).

In addition, we recognize that our role extends beyond our own operations as a great majority of our
GHG emissions (99%) comes from our suppliers,
the use of our sold products and other parts of ourvalue chain. To address this, we will continue to workwith our suppliers and develop lower carbon emitting products, using less electricity during their lifetime to support our customers in their transition to a
low carbon future.

Key performance indicators
In 2021, we started the process of calculating ourcarbon footprint, which allowed us to identify where
the gaps are, thus building the foundation of our approach to fully map and quantify our 2023 carbon
footprint.

In 2023, we have made significant progress reducing our GHG emissions from our downstream transportation (intercompany transportation) (see casestudy on page 27). We have piloted a few GHG emissions reduction measures, including switching fromair freight to train or sea freight, which have been
positively received and has led to significant emissions reduction (1,000 tonnes of CO2e saved compared to 2022). Following the success of our pilot,
we will be continuing this initiative next year.
Working with key customers and co-developing innovative solutions is vital to staying ahead in themarket and being able to satisfy demand. A key
technical advancement we are working on is our approach to develop smaller, lighter, cheaper and better sensors – “miniaturization.” We do it because it
makes business sense and it is the right thing to do.

In 2023, we evolved our methodology compared tolast year. We have expanded our scope, adding new
LEM entities in our Scope 1 and 2 emissions calculations – our 2023 absolute data now covers all of ourgroup entities besides eight small sales offices with
one to five employees (in total 25 employees). As aresult, our 2023 Scope 1 data has increased compared to 2022, from 37 tonnes of CO2e to 173 tonnesof CO2e. This is not a result of an increase in consumption but rather an improvement in the scope ofdata we have collected. This year’s figure is an accurate representation of our global Scope 1 emissions.
Compared to 2022, we have added our production
sites in Japan and our newly built Malaysian site aswell as our distribution centres in Germany and the
US. In terms of absolute reduction opportunities, wehave switched 100% of our Germany site cars to EVs.
Our Scope 2 market-based figure reduced by 80%
despite the increase in coverage. This is mainly due
to our investments in EACs for our China locations andthe switch to 100% renewable electricity in Bulgaria.
In 2023, we successfully mapped out and determinedwhich of the 15 categories listed in the GHG Protocol
Corporate Value Chain (Scope 3) Standard are relevant to us. Out of the 15 categories, 12 were identified as relevant to our business and three were not.
The emissions from all our relevant categories have

LEM Sustainability Report 23 | 2424

been calculated (see table below). Our Scope 3
GHG emissions make up 99% of our total carbon
footprint and out of the 15 Scope 3 categories, our
top three material categories are “category 1: purchased goods and services” (38% of our overall
GHG emissions), “category 4: upstream transportation and distribution” (19%) and “category 11: use ofsold products” (39%).

KPI – Energy use and GHG emissions

As a result of our change in scope, the increase between 2022 and 2023 Scope 3 global figures islargely an artifact of better data collection and not
linked to any significant increase in absolute emissions. We have added three new categories, including category 11 which makes up 39% of the global
Scope 3 share. The inclusion of the new category 11
has had the biggest impact on the difference between 2023 and last year.

Units

2023

2022*

Global energy consumption

kWh7,082,493

7,453,864

Global energy consumption from fossil fuelkWh821,794

3,921,237

Global energy consumption from nuclearkWh85,433451,941

Global energy consumption from renewablekWh6,175,266

2,778,418

kWh/CHF

0.017

0.018

Energy use

Global energy consumption intensity
GHG emissions
Global Scope 1

tCO2e

172

39

Global Scope 2 (location-based)

tCO2e

2,434

2,420

Global Scope 2 (market-based)

tCO2e

623

4,066

Global Scope 3

tCO2e

192,045

100,454

Category 1: Purchased Goods and Services

tCO2e73,2172,667

Category 2: Capital Goods

tCO2e

Category 3: Fuel- and Energy-Related Activities
Not Included in Scope 1 or Scope 2 (NEW)tCO2eCategory 4: Upstream Transportation and Distribution

tCO2e

36,621Category 5: Waste Generated in Operations

tCO2e

48

Category 6: Business travel

tCO2e

2,053

Category 7: Employee Commuting

tCO2e

1,460

Category 8: Upstream Leased Assets (NEW)

tCO2e

0

Category 9: Downstream Transportation and Distribution

tCO2e

217

Category 10: Processing of Sold Products

tCO2e

n/a

Category 11: Use of Sold Products (NEW)tCO2e75,270Category 12: End-of-Life Treatment of Sold Products (NEW)

tCO2e

308

Category 13: Downstream Leased Assets (NEW)

tCO2e

0

Category 14: Franchises

tCO2e

n/a

Category 15: Investments

tCO2e

n/a

Global Scope 1 and 2 (location-based)

tCO2e

2,606

184

2,459

25

LEM Sustainability Report 23 | 24

Transitioning
to a sustainable future

KPI – Energy use and GHG emissions

Units

2023

2022*

Global Scope 1 and 2 (market-based)

tCO2e

796

4,105

Global Scope 1, 2 (location-based) and 3

tCO2e

194,651

102,913

Global Scope 1, 2 (market-based) and 3

tCO2e

192,841

104,559

Global Scope 1, 2 (location-based) and 3 CO2e intensity

gCO2e/
product

2,767

1,497

Global Scope 1, 2 (market-based) and 3 CO2e intensity

gCO2e/
product

2,741

1,521

Global Scope 1, 2 (location-based) and 3 CO2e intensity

gCO2e/
revenue

480

253

Global Scope 1, 2 (market-based) and 3 CO2e intensity

gCO2e/
revenue475

257*2022 data is not comparable to 2023 as we have significantly expanded the scope of the data collected and improved data quality. We have added more sites in2023 for our Scope 1 and 2 emissions, we have added five new Scope 3 categories (category 3, 8, 10 to 15) and we have improved the robustness of our
methodology and data collection for other categories (e.g Scope 3 category 1).

Plans for 2024
In the coming year we will be working on our net zeroroadmap, identifying the key actions to prioritize andthe key milestones needed to meet our net zero targets. We will also develop and implement action plansacross priority areas. We will prioritize actions throughthe drive of the R&D, Purchasing, Global Product Management and Supply Chain departments mainly concerned by the key emissions highlighted above. We

LEM Sustainability Report 23 | 24

26

also see alignment with the Science Based Targets
Initiative as a major step to validate our net zero roadmap and this will be conducted in the next few years.
In preparation for CSRD, we will also develop climate
scenario analysis to better understand the risks, opportunities and impact of climate change across different plausible future climate scenarios.

Case study
Decarbonizing outboundintercompany transportation

After assessing our GHG emission sources, we realized the significance ofprioritizing our intercompany transportation for reducing our emissions. This
intercontinental traffic between our
production sites is 100% under ourcontrol and accounts for roughly 20% of
our transportation emissions. Air transport is the primary reason for theseemissions. To address this, we aretransitioning gradually to rail and sea
freight. In 2022, we initiated a pilot
project to assess the feasibility of thesealternatives. Additionally, we establishedreplacement targets for our top fivebusiest lanes. Our roadmap begins with
optimizing our busiest lane:– In 2022 we started shifting from air to rail shipments from China to Europe. Rail tonnage ratio
represented 12% of the total goods shipped
between those two areas and we targeted anincrease to 50% by 2025. By the end of December 2023, we already reached almost 50%, saving
741 tonnes of CO2e compared to 2022.

– By the end of December 2023, we also progressed in replacing air to rail/sea shipments on
those other busy routes, where air shipment
was the only transportation used, saving about
250 tonnes of CO2e:– China to Japan: 22% of the tonnage replaced.
– China to USA: 7% of the tonnage replaced.
– Bulgaria to USA: 6% of the tonnage replaced.
– Bulgaria to China: 5% of the tonnage replaced.
– Switzerland to China: 5% of the tonnage
replaced.
In 2023, we started to use a digital Transportation
Management System to accurately track our transportation data. CO2e emissions are calculated for all
shipments quoted in the platform for all modes oftransportation after the delivery of the shipment.
Supply chain managers at a global and local level areencouraged to leverage the benefits of the platform
and move away from air transport as emissions reduction are part of their performance objectives.
We will continue to focus on developing alternativetransportation modes throughout the next few years
to reduce our impact.

Tonnage CO2 replaced by December 2023
compared to 2022
Rail/sea freight

Airfreight

China to Europe: ~50%
China to Japan: 22%
China to USA: 7%
Bulgaria to USA: 6%
Bulgaria to China: 5%
Switzerland to China: 5%

27

LEM Sustainability Report 23 | 24

Transitioning
to a sustainable future

Waste
reduction
At LEM we see waste reduction as not only a sustainability imperative, but also a commercial imperative.
Where we can innovate to reduce waste we do, reducing our demand for raw materials and therefore
decreasing our impact on the environment.
Impacts, risks and opportunities
Our business relies on the ability to access raw materials. This includes for our products and their packaging. Similarly to many industries, minimizing waste
generated from our manufacturing process is important for us to reduce our environmental impact and is
the right thing to do. It reduces the impact on depletion of non-renewable resources through resource
inflows, use and outflows of materials used in own
operations and it reduces the impact on our customers’ waste disposal through taking back customers’
shipping packages to recycle/reuse at LEM. This iswhy, waste reduction has been identified as one ofour material topics in our double materiality assessment.
Policies
We have a Group Environmental Policy that underpins
our commitment to design innovative products with
reduced adverse environmental impact from purchased components and production, to use and disposal as well as our commitment to manage ourwaste responsibly (see policy table on pages 14–15).
The policy also ensures we set ambitious, yet realistic objectives, within the scope of the Environmental
Management System (EMS), to achieve continual improvement. Complementing the environmental policy, we also have an Group EMS Manual as well as aGroup Product Environment Profile (PEP) (see casestudy on page 32).
Commitments, targets and measures
LEM applies a waste hierarchy aiming to prevent, reuse, recycle and recover waste when feasible. Our
waste management systems effectively handles both
hazardous and non-hazardous waste.

LEM Sustainability Report 23 | 24

28

We work on reducing scraps in our manufacturing
sites through miniaturization of our products and bysorting parts into different bi-products that can bereused. For example, we have separate bins to collect plastic and copper parts that can either be reused or sold to other industries. We have established partnerships with specialized waste management companies to handle the sorting and resale of
our waste materials, particularly metals. This proactive approach ensures that our waste is efficiently
processed, with valuable materials extracted for resale to third parties. By working with these partners,
we streamline our waste management processes,
potentially generate revenue from materials thatwould otherwise be scrapped, contribute to environmental sustainability by reducing the need forvirgin resources and ensure compliance with environmental regulations. Ongoing collaboration with
our waste management partners allows us to also
meet the Basel Convention Guidelines which controls transboundary movements and disposal ofhazardous waste.
Key performance indicators
In 2023 our waste generated decreased by 33%
compared to 2022 from 529 tonnes to 357 tonnes.
The higher figure in 2022 is largely a result of moving
our headquarters to a new location and the disposalof old goods and machinery.
KPI – Waste management

Units

2023

2022

Total amount of waste
generated for the Group

tonnes357

529

Plans for 2024
In the upcoming year, our strategy encompasses acomprehensive data collection initiative focused on
elucidating the fate of waste across various disposal
methods, including landfill, recycling and beneficial
reuse. We are also looking to take a deep dive into
our various waste streams to identify priority areas.
By tracking the trajectories of waste materials, we
aim to gain valuable insights into improving ourwaste management system. This will also enable us
to optimize resource allocation, minimize environmental footprint and lead to targeted approaches
throughout our operations. Our aim is to foster amore resilient and responsible waste management
system for the benefit of both our organization andour supply chain.

Case study
Managing ourwaste responsibly

At our site in Lyon, we implemented a
new waste sorting scheme in 2023 toensure our waste is disposed of appropriately.
We began the project by raising awareness withposters and brightly colored and labelled bins. Employees are sorting waste into a range of collection
bins which ranged from cardboard, paper and glass
to electrical and electronic equipment (WEEE) andhazardous waste including batteries. Where possible we first seek to reduce the creation of waste andthen to reuse the waste if feasible. Finally, we look
to recycling, recovery and disposal as our final options. For WEEE we particularly aim to reuse components before recycling and this year (2023) a total of
160kg of WEEE was collected to be recycled. Regarding hazardous waste, we safely recycled, lastyear, 17 defective lead-acid batteries equating toaround 800kg of waste which was prevented fromreaching landfill.

Electrical and electronicequipment collection bin
filled by employees.

29

LEM Sustainability Report 23 | 24

Transitioning
to a sustainable future

Innovation and circular
economyEmbracing innovation at LEM allows us to stay aheadof the curve, driving continuous improvement in our
products and processes, while fostering creativity
and adaptation to emerging challenges and opportunities. Meanwhile, incorporating the circular economy into our business practices guides us to a moreregenerative approach where resources are utilized
efficiently, waste is minimized and products are designed with longevity and recyclability in mind. By
integrating these principles into our business ethics, we not only enhance operational efficiency andreduce environmental impact but also cultivate resilience, competitiveness and long-term value for our
stakeholders.
Impacts, risks and opportunities
Our latest evaluation of double materiality underscored the significance of the circular economy resource inflows and outflows to our stakeholders.
Several risks and opportunities were identified
which impact our market share. If products are developed and deployed that are too expensive forprice sensitive customers, for which circularity issecondary, market share could reduce. Conversely,
if we anticipate and meet changing customer demand for more circular and sustainable products, we
can boost our market share. A further risk noted theusage of new and more complex materials including
processes that require more or different resources
and/or capabilities and competencies. Projects anddevelopments have the potential to become more
inefficient, offering customers a narrower productportfolio lacking innovation and failing to meet customer demand regarding products and costs.
Following the risks and opportunities associated withthe circular economy, our assessment also examined
our impact. It highlights that LEM has a positive impact on the transition to a circular economy throughthe design of innovative products that reduce their

LEM Sustainability Report 23 | 24

30

adverse environmental impact (including the impact
arising from production, use and disposal). Consequently, those products will have lower impact on
the environment over their lifecycle, due to improvements such as the use of recycled materials, renewable energy and recyclability. Reuse was also identified as a positive impact area as components reaching end of life are often being reused by customers
or are returned to us for reuse decreasing the adverse waste impacts. However, the assessment also
acknowledged the negative impact LEM has throughthe depletion of non-renewable resources acrossresource inflows, use and outflows of materials usedin the entire supply chain and own operations. Products will also have a negative impact during theirlifecycle e.g. energy used and at the end of life,
waste will be generated by customers.
Consumer information was also identified as an opportunity in our double materiality assessment. LEM
is well positioned to capitalize on the the increased
demand for products and solutions that can help society make progress and address global challenges,
such as tackling climate change by reducing energy
consumption and GHG emissions and optimizing
systems usage. Therefore, our impact will be on
consumers through innovative electrical solutions
that can help them and society accelerate the transition to a sustainable future. Our sensors and solutions play a key role in monitoring and optimizing energy consumption for the following applications:– Electric motor drives.
– Power conversion.
– Electrical safety.
– Battery management.
– Energy monitoring.
– Energy metering.
Policies
Our overarching policy relevant to the circular economy is our Group Environmental Policy, which can befound in our sustainability policies table on pages
14-15. It commits LEM to enhancing environmental
protection and performance within our business.
Specifically, it involves designing innovative products which decreases the adverse associated envi-ronmental impacts from purchased components andproduction, to use and disposal. Other relevant internal policies include our Group Environmental Management System (EMS) Manual and our Group Product Environmental Profile.
Regarding our consumer information topic area,
several policies are relevant including our Group Labor & Human Rights Policy, Group Employee Privacy
Policy, Group Safety Policy, Suppliers General Requirements Manual and our Code of Conduct. All ofthese can be found in our sustainability policies table on pages 14–15.
Commitments, targets and measures
One of the measures adopted to mitigate the risks
and embrace the opportunities mentioned above, isthe creation of an environmental profile for new products before launch. The profile includes recyclability
and recoverability rates and material saving compared to models from previous generations. You canfind several environmental profiles and eco-design
sheets on our website. For example, in 2021, the total
mass of the HST family sensor was reduced by 36%
compared to the HSN family sensor launched in 2017.
LEM also conducted fully fledged life-cycle analysis for six of our products, representative of LEM’s
technologies, to determine our wider environmental
impact and identify circular opportunities. The results were then extended to the overall LEM portfolio to calculate the final footprint of the full lifecycleof our products.

We plan to train representatives from different functions (R&D, Purchasing, Industrial Engineering) fromacross all our sites on Product Carbon Footprint(PCF) and Life Cycle Assessment (LCA) calculations. This will allow us to have the in-house expertise to calculate these ourselves for any new products and to provide precise numbers to any stakeholder who requests it. Currently, this is done for us
by a third-party company.
By the end of May 2024, we will be releasing an internal sustainability database, which will provide us
with the opportunity to respond quickly and moreaccurately to any request coming from external
stakeholders on ESG topics. It will be based on pastenquiries we have received as well as questionnaires from external stakeholders and the respective
responses provided. LEM employees will be able tosearch key words and find the relevant explanation.
A glossary will be added to define the usual andmore complex sustainability jargon as well as a “raisea new request” functionality if the information foundis not relevant. Last but not least, all the PCF and
LCA information will also be internally accessible
throughout this database, which will allow any employee to have access to this information to respond to any queries (e.g., the Sales team). The data available on the database will, of course, be updated on a regular basis.

Key performance indicators
In light of the inclusion of this topic as a material topic in our recent double materiality assessment, we
will be working on identifying group level key performance metrics to track and monitor progress in2024.
Plans for 2024
In the coming year, LEM is launching several new
products with sustainability in mind. One of those
products is the Open Loop Coreless Integrated(OLCI) current measurement sensor which exemplifies our sustainability principles by significantly reducing weight and energy consumption. The product was also created with end-of-life in mind as it
has been created with 100% recyclable materials(see case study on page 33).

31

LEM Sustainability Report 23 | 24

Case study
Circular economy: our ProductEnvironmental Profile (PEP)

When designing high performance
products, LEM is committed to respecting the environment and the principles
of sustainable development. Therefore,a Group Product Environmental Profile isfilled out by the design centers during
the product development process.
The profile outlines our commitment and approachto design products with the least possible environmental impact on:– human health and safety,– natural resources: consumption of
raw materials and energy,– ecosystem conservation:
pollution of water, ground and air,
– climate change.

This profile is based on ISO 22628 for general principles of environmental statements. It is currently usedby our design centers to ensure compliance with regulations such as RoHS (Restriction of Hazardous Substances) Directive and REACH (Registration, Evaluation, Authorisation and Restriction of Chemicals).
Moreover, it provides information on any environmental improvements/benefits of the new product:– raw materials used,– packaging improvements such as rate of recycling (for e.g. minimum quantity in a package:
six products. Cardboard packaging instead ofindividual polystyrene.),– use of alternative packaging to reduce environmental impacts– end of life such as recyclability or recoverability
rate of the new product,– other key data points such as mass of product,
mass of plastic parts, power consumption whenin use, or packaging volume/product.
In 2024, we aim to make this process for the design
centers more streamlined and increase training forour team.

Product
Environment
Profile for ourIN 1000.

LEM Sustainability Report 23 | 24

32

Case study
Designing sensors:more performance, less energy
usage, less material

Our new sensor, OLCI, which stands
for Open Loop Coreless Integrated, isan example of our innovation and path
towards sustainability. It has been designed to fit the needs of high current
applications especially in the renewableenergy segment (high power windturbines, hydrogen electrolizers, etc.)
The OLCI sensor provides a 1 MHz bandwidth whichallows it to measure high current from 2,000 A up to
42,000 A without surge current limitations.
Compared to existing solutions to detect and measure current in these applications, the OLCI sensor
is a more compact and lighter option with a weight
up to 5 kg lower than comparable core based open
and closed loop current sensors.
We see the following arguments to claim the highsustainability characteristics of this new sensor:
1. Tailored to sustainable applications: the main
usage of the new OLCI sensor is renewableenergy systems such as high current rectifier
stacks for Hydrogen electrolysis
2. Coreless technology means that the OLCI sensor has been designed without a magnetic coreand secondary copper winding. This means theusage of different raw materials is reduced by
80% therefore reducing our GHG emissions onpurchased components. The following are quantities saved for each sensor:– 1 kg of copper,– 750 g of potting material and plastic housing,– 500 g of magnetic material and miscellaneous components.

3.

The design of the sensor, with its large aperture, allows for a simpler busbar design and assembly, reducing the number of screws and fixtures needed.
4. An intrinsic lower energy consumption compared
to existing solutions: the OLCI requires 85% lessenergy, saving up to 150 kW/h over a year whichis equivalent to continuous usage of 3.5 x 5 W
LED lamps.
5. More sustainable packaging: the OLCI packaging is:– Made from 100% recyclable material and,– includes 100% recyclable / recoverable
material at end of life (Acc. ISO 22628:2002).
		
The above-mentioned characteristics demonstrate
our continuous approach towards miniaturization of
our products and our constant focus towards developing new technologies to reduce the GHG impactof our products. Finally, our OLCI will be produced in
our plant in Bulgaria where our key suppliers for PCB
and plastic cases are local therefore reducing thetransportation footprint.

Material and energy savings by using OLCIvs. two close loop sensors in parallel
Yearly energy consumption (kW/h)
0

20

40

60

80

100

120

140

160

180

2 x LF
2005
OLCI
FRG

Weight (g)
0

500

1000

1500

2000
Housing

Secondary winding(Copper)Packing material
2 x LF
2005

2500

Magneticpart
PCB
Miscellaneous

OLCI
FRG

33

LEM Sustainability Report 23 | 24

Working
responsiblyCulture and values
LEM is a global organization with 1,800 team members working in 17 countries. We are very muchaware that the successful delivery of our company
strategy and our ability to fulfil our purpose is highly
dependent on us uniting behind a set of values andbehaviors that we call the LEM Blue Behaviors.
Our Blue Culture was born in 2021 as a cornerstoneof our transformation journey to create a high-performance culture, based on empowerment, innovationand collaboration, where each of us can feel safe toexpress our full potential and showcase our talents.
Over 100 employees representing most of our functions in various locations were involved in 15 workshops and worked together to brainstorm and design our LEM Blue Behaviors. They are a common
frame of reference for behaviors to adopt in our daily work. It is illustrated by concrete and operational
practices, encouraged and valued within the company and well supported by our processes which
are designed to guarantee the sustainable successof our company. Below are a few examples of LEM
Blue Behaviors for illustration purposes:
1.

Innovation and continuous improvement
mindset– Promote new ideas and initiatives.
– Use appropriate data to support decisions.

2.

Customer orientation and growth mindset– Develop and sustain effective relationships
with customers, gaining their trust and respect.
– Balance short-term and long-term businessobjectives.

3.

Team player mindset (collaboration and teamdeveloper)– Treat all people with respect, earn trust andsupport diversity in all its forms.
– Communicate in an honest and transparent
way.

4.

Player / learner mindset– Follow the LEM Code of Conduct when making judgments and taking decisions.
– Show humility and self-awareness.

In 2023, we formalized the LEM Employer Value Proposition, which is strongly inspired by the way LEM
colleagues experience our culture and purpose. To
do so we have collected insights from a large groupof employees on how it felt to work at LEM and whatmakes LEM different as an employer. The outcome
has been summarized under the three pillars below:
5.

Our mindset: connected by care
– We support the personal within the professional. Our culture not only embraces all
identities, it encourages meaningful engagement between colleagues to activate thepower of our diversity through teamwork
too.

6.

Our culture: empowerment in action– We place our trust in people, empowering
them to unlock their potential and act withpurpose. Working at LEM is about creating
the means that accelerate the transition to asustainable future.

7.

Our growth: ingenuity in motion– Developing cutting-edge solutions that enable a more sustainable tomorrow is not justwhat we do, it is the mission that drives us.
As leaders in our field, a career here is an invitation to be part of our winning team, contributing to our legacy of success and shaping future impact.

35

LEM Sustainability Report 23 | 24

Working responsibly

Investingin our People
Human capital development is a pivotal element at
LEM, contributing to the effectiveness and efficiency of our business operations. Our mindset, skills
and knowledge directly impact our ability to innovate, adapt to market dynamics and maintain a competitive edge. By investing in the continuous development of our employees, we ensure that they remain equipped with the latest tools, techniques andinsights necessary to excel in their roles.
Impacts, risks and opportunities
At LEM we highly value the remarkable contribution
our people make every day. We also recognize theopportunity that arises from creating the best possible work environment so that each of us can fulfil
our potential. We are convinced that our sustainablesuccess is highly correlated to the level of engagement and skills of our employees. Providing a physically and psychologically safe working environmentis a must. We work relentlessly to improve our working conditions and ensure our people have accessto the right training and development opportunities.
Policies
To ensure we are addressing the associated humancapital risks and opportunities and positively impacting our employees, this year we introduced our
new Labor & Human Rights Policy, which covers social dialogue, working conditions, compensationand more. Other relevant policies include our Employee Privacy Policy, Group Safety Policy and therecently reshaped Code of Conduct. You can find allof our sustainability-related policies in our policies
table on pages 14–15.
Commitments, goals and measures
Listening to and engaging with, our employees is
one of our top priorities. We aim to build a collaborative environment where employees can thrive fromtheir first day at LEM thanks to our new onboarding
program.

LEM Sustainability Report 23 | 24

36

To support our growth ambition we are actively adding new talents to the LEM team. New joiners are onboarded via our comprehensive onboarding program, helping those who are joining LEM feel athome as quickly as possible. Onboarding is a criticalstep in the employee lifecycle which acts as a catalyst for employee satisfaction, retention and productivity. Our onboarding process has several components, including our LEM Explorer Path, which isa 90 day game-based program with missions, challenges, quizzes, surveys, enigmas and group tasks
to solve. We have also introduced Corporate Sessions every Friday which are led by Group Heads ofFunction to highlight the mission, challenges, organization, roadmaps and key figures for new joiners.
In the last Corporate Session there is dedicated timefor employees to discuss with Frank Rehfeld, CEO,LEM’s strategy and Blue Culture. The overall satisfaction score, from our latest cohort of 150 new
joiners, was 4.7 out of 5.
We engage with our employees and community
through a number of channels, including our intranet(MyLEM) and bi-annual employee engagement survey. We also engage in-person during regular gatherings through townhall meetings, fireside chats, local festive events or jubilees. We measure the levelof employee engagement through an employee engagement survey. The latest survey was conducted
in 2022 and the next one is scheduled for early2025. In our latest employee engagement survey
we achieved above worldwide benchmark for all areas including agility, energy, growth, purpose, relationship and reward. It also demonstrated that ouremployees had a good understanding of our LEM
Blue Behaviors described above.
We continuously support the development andgrowth of our people, ensuring they have the rightsupport and tools to succeed in their careers. At theend of March 2024, 74% of our employees were actively using LinkedIn Learning and over 4,300 courses were completed on the platform, which represented a total of 6,000 hours of training. Additionally, ourgoal for 2023 was to have all indirect employees receiving on average 12 hours of face-to-face training
per year. We overachieved that target as, on average,
LEM people received 14 hours of face-to-face training for a total investment of 18,800 hours of learning.

The development and training needs are collected
twice a year as part of our performance review cycle.
This process, supported by our new Human Resources Information System, ensures that everyone
knows what is expected from them and has the opportunity to reflect on their individual career development. In parallel, we have extended the scope ofour people review to allow us to identify and develop
today the future leaders of LEM. The performanceand people review process take into consideration
the objectives achieved during the year and the hardskills assessment, which are delivered to the employee following the LEM Blue Behaviors guidelines.
In several of our locations, we offer apprenticeshipand graduate opportunities to students who cangain on-hand experience working with our teams. To
do so, we developed partnerships with STEM universities in all the key areas where we are located.
We are especially proud to underline long relation-

ships with the Technical Schools J. Atanasoff and N.
Vaptsarov in Sofia (see case study on page 38).
Finally, we also monitor our voluntary turnover rate
and the reasons why team members decide to leave.
In 2023, our global voluntary turnover over rate decreased to 6% from 7% in 2022.
Key performance indicators
We facilitate collective bargaining and social dialogue
across our facilities. The data below shows that 44%
of our European Economic Area (EEA) employees
were covered by collective bargaining agreements
and 90% have employee representatives. In non-EEA
countries collective bargaining and employee representatives mechanisms are less common and our employees are not covered.
As described above, the immense majority of our DL
and IDL employees participate in regular performance and career development reviews.

KPI – People investment

Units

2023

EEA collective bargaining coverage%

44

Non-EEA collective bargaining coverage%

0

EEA social dialogue coverage (employee representatives)%

92

Non-EEA social dialogue coverage (employee representatives)%0Collective bargaining and social dialogue

Performance and development
Percentage of DL that participated in regular performance review (during FY23/24)%

90

Percentage of IDL that participated in regular performance andcareer development reviews (in June 2023 for FY22/23)*

%

100

hours

14

Number of face-to-face training hours per IDL*For employees arrived before 30 September 2022 and potentially those who left after 30 June 2023.

Plans for 2024
Our quest to build the best team and create the best
possible work environment will continue to be ourpriority in 2024. To that end, we are launching a fully-fledged leadership development program, inwhich 200 LEM leaders will be enrolled. For eachparticipant, it will involve seven full days of training
including four face-to-face days and 360 feedback
both at the beginning and at the end of the program,as well as active learning and coaching.

37

LEM Sustainability Report 23 | 24

Case study
Providing real world
experiences to students

Since 2015, LEM has been one of thepartners of the dual education forthe modern needs and requirements ofthe society (DOMINO) project, which
focuses on modernizing Bulgarian
vocational education to meet contemporary societal needs.
The project’s primary goal is to establish a frameworkand enhance the capacity for integrating work-basedlearning principles into Bulgaria’s professional education system. Dual education was initially introduced in
Bulgaria in 2015 through the “Swiss support for the
introduction of dual track principles in the Bulgarian
vocational education system” project, funded by
Switzerland under the Bulgarian-Swiss Cooperation
Program, with a total budget of CHF 3,530,000, supplemented by 15% co-funding from the Bulgarian
Ministry of Education and Science. This five-year educational model entails a balance between classroom instruction and practical experience at production sites (in the last two years), varying according tostudents’ grade levels. Collaborating with technicalhigh schools and universities, we have provided students with invaluable opportunities to gain hands-on
experience within our teams over the past years.

Dual education
students visiting
our plant in Sofia.

LEM Sustainability Report 23 | 24

38

LEM’s objectives were:– to support the improvement of the education
provided in technical schools;– to enhance students’ professional orientation
by direct contact with production site and engineering processes;– to increase students’ awareness of job opportunities in the country; and– to ensure long-term talent attraction
by promoting the LEM employer brand.
Between 2016 and 2023, 18 students graduatedsuccessfully in Dual education at LEM Bulgaria finishing their five-year learning journey. Four of themjoined us in different departments (Failure Analysis
Engineering, Design Engineering, Product Quality)with permanent contracts whilst five new students
are starting the program this year. Moreover, we regulary offer summer job positions to these students
to deepen their knowledge of our company.
We are also continuously raising awareness among
other technical students through two key initiatives
enabling a better understanding of LEM as a dynamic and recognized employer in the electronics market in Sofia:– We welcome over 150 students from several highschools and from the Technical University Sofia
every year on our premises. We organize company presentations, visits to the production floors
and discussion with professionals.
– Our Electronic Design Lead, Zhani Dimchev, hasalso been sharing his knowledge and experienceof LEM products and technologies during dedicated lectures to students of the Faculty of Electronic Engineering and Technologies in the Technical University in Sofia.

Diversity, equity
and inclusion

Newly reported DEI metrics include Executive Committee and Senior Manager gender splits. They also
include distribution of employees by age group.

At LEM we recognize diversity, equity and inclusion(DEI), as an imperative that not only shapes our culture
but also drives our success. Embracing DEI is not justa moral imperative; it is a strategic business decisionthat fosters innovation, enhances decision-making
processes and cultivates a dynamic work environment
where every individual feels valued and empowered tocontribute their unique perspectives and talents.

Our total headcount figures show an almost evensplit between men and women. Although our employee gender split highlights our overall gender diversity, our newly disclosed DEI metrics have highlighted the gap across levels of seniority where
women are clearly underrepresented at the top. Thisgap is even more obvious in technical, engineering,sales and R&D functions.

In this sustainability report we are pleased to disclose several new diversity metrics, increasing not
only our transparency but our accountability to all
our stakeholders on our social practices.

LEM age pyramid (permanent employees)
MaleFemaleAbove 66 years

2

3

Between 61 and 65 years

1412

Between 56 and 60 years

56

37

Between 51 and 55 years

72

58

Between 46 and 50 years

74

93

Between 41 and 45 years

156

181

Between 36 and 40 years

172

216

Between 31 and 35 years

134

108

Between 26 and 30 years

68

40

Between 21 and 25 years

36

16

Between 18 and 20 years

3

2

787

766

Total

39

LEM Sustainability Report 23 | 24

Working responsibly

Key performance indicators
Below demonstrates a breakdown of our employees by gender and age. As previously mentioned,
49% of our workforce are women and 51% aremen. We have a total of seven Executive Commit-

tee members, of which six are men and one isa woman. We also have 24 senior leaders within
LEM, of which 20 are men and four are women. We
also keep record of non-employee workers on oursites.

KPI – Employee diversity

Units

2023

Total number of permanent employees

2022

Units

1,553

Female employees

%

49

54

Male employees

%

51

46

Units

7

Total number of Executive Committee members
Female members of the Executive Committee%

14

Male members of the Executive Committee%

86

Total number of senior leaders management employees
Female senior leaders employees
Male senior leaders employees
Total number of non-employee workers in own
workforce TEMP agency – monthly average

Units

24

%

17

%

83

Units

213

The distribution of employees by age group
Under 30 years old%

11

31–50 years old%73

Above 51 years old%

16

Plan for 2024
We are convinced that increasing gender diversity
in leadership positions starts at the recruitment
stage. One of the factors for success is to have arobust and non-biased hiring process to support
our DEI commitments. This is why, in 2024, we willtrain HR colleagues and our hiring managers on
how to identify and mitigate unconscious bias. The
aim is to have our 200 leaders trained on this topic

LEM Sustainability Report 23 | 24

40

by the end of 2024. In addition, we will track andrequire that all candidate short lists, generated byboth our external and internal recruiters, include
both male and female profiles. In parallel, we will
launch a series of initiatives to ensure that we continue to build an inclusive work environment for
women, this will include an assessment of our benefit offering and a dedicated mentoring program forour female leaders.

Health, safety andwellbeing of employees
We take the health, safety and wellbeing of our employees seriously. We firmly believe that a thriving
workforce is built upon a foundation of robust wellbeing initiatives, comprehensive health support andunwavering commitment to safety procedures.
To ensure we maintain the highest standards, ourgroup health and safety policy sets out our expectations for all prospective and current employees of
the company as well as external people on any LEM
site (e.g., volunteers, contractors, consultants). You
can find all of our sustainability-related policies in
our table on pages 14–15.
During 2023, we have delivered health and safety
training/refreshers across our key sites. They wereboth generic and specific to local needs (e.g. fire
safety, chemical spills, lifting equipment). We also
regularly host health prevention events, they aim toraise awareness of the importance of health andwell-being and each take a specific focus, such as
cancer prevention. In October 2023, we supported

the HOPE association to raise awareness and funds
among LEM Geneva employees for breast cancer. In
March 2024, another event included talks from theFoundation and Otium Centres, Geneva Foundation
for Cancer Screening and Cancer Support Switzerland. Alongside these presentations, individual consultations with a holistic nutritionist were offered to
employees.
In line with the “care” pillar of our Employer Value
Proposition, we support employee wellbeing, both interms of mental and physical wellbeing. As such, several local entities are regularly subsidizing sport activities and events. For example, we support registrations at fitness studios in Germany and Switzerlandand participate in local running events in Switzerland,
France and Bulgaria. In China and Japan, where the“club” culture is well implemented, we foster participation in sport and other leisure clubs to develop
team spirit and wellbeing. Last but not least, we organized our second LEM Cycling Challenge to unite
LEM’s riders from all levels in France, Switzerland andBulgaria who all had to cycle through diverse terrains
and picturesque vistas for 200 km from our site in
Geneva to our R&D center in Lyon.

LEM cycling
challengers
departingfrom our sitein Geneva.

41

LEM Sustainability Report 23 | 24

Working responsibly

KPI – Health and safety

Units

2023

Number of work-related fatalities(by employees, non-employees and by other workers working on site)

Units

0

Number of recordable work-related accidents(by employees and non-employees on production sites)

Units

5

Total number of accidents/
working hours x 200,0001

0.30

Units

8

Total number of accidents/
number of employees
working hours x 200,0001

0.47

Days

95

Rate of recordable work-related accidents(by employees and non-employees)
Number of recordable work-related incidents(by employees and non-employees on production sites)
Rate of recordable work-related incidents(by employees and non-employees)
Number of days lost to work-related injuries, accidents, fatalities
and ill health (by employees and non-employees)
1 200,000 is a fixed coefficient (50 working weeks x 40 hours x 100): see osha.gov

Finally, to ensure our physical locations are conducive to high productivity, collaboration, innovationand employee wellbeing, we have embarked upon arefurbishment program for offices in Bulgaria, China,
France and the United States. We have also opened
new offices in Bulgaria, China and France. Where
possible these offices are more efficient to reduce
our carbon emissions and provide revamped working conditions with ergonomic space, natural light,
low-noise working atmosphere and state-of-the-art
IT equipment for our employees.
Key performance indicators
We track and monitor the number of work-related
accidents/incidents and fatalities year on year. Overthe past year, we have had five work-related accidents reported, with an accident rate of 0.30 andeight work-related incidences with the incident rateof 0.47.

LEM Sustainability Report 23 | 24

42

Plan for 2024
To improve our day-to-day comprehension andmonitoring of health and safety, we plan to define
and implement a dedicated health and safety management system for the group over the next year. It
will be composed of a set of policies, guidelines
and/or tools to reduce work-related accidents, incidents, illness and dangers to employees. Ultimately,
the target is to have zero work-related accidents
and incidents by employees and non-employees.
To calculate precisely our CO2 footprint for Scope 3
category 7, Employee Commuting, we ran the first
employee commuting survey in early 2024 across all
our entities. We collected a 75% response rateshowing the interest of our employees towards sucha topic. Following the results, we are committed tosupport our employees to reduce their individual impact. Hence, we will define and implement local action plans supported by a global framework to help
our employee to use more sustainable transportation means (i.e. EVs, public transportation, car-pooling). To continuously support wellbeing, we will put
a strong focus on developing healthy mobility suchas walking and (e-)biking. Moreover, we will continue supporting local healthy initiatives.

Fostering
responsible
businesspractices

Business
ethicsResponsible business practices lie at the heart ofeverything we do, from the way we treat our employees, to our relationships with suppliers, our interactions with customers and the conditions in our supply chain. We strive for the highest standards of integrity, honesty and transparency. To underscore
this commitment, we became signatories to theUnited Nations Global Compact in September 2006
and since then, we have diligently adhered to its 10
Principles and 17 Sustainable Development Goals.
Impacts, risks and opportunities
Our recent double materiality assessment unequivocally reaffirmed the pivotal role of business ethics at
LEM for our stakeholders and our business. We aredelighted to share that LEM's commitment to transparent and ethical business practices has yielded amaterial positive impact on society, employees,
customers, shareholders and suppliers. This affirmation underscores the effectiveness of LEM's comprehensive whistleblowing process, policies, training initiatives and other endeavors aimed at fostering ethical conduct throughout our operations.
Moreover, our double materiality assessment shedlight on the potential risks posed by financial loss ordamage should LEM falter in complying with business ethics regulations, alongside the threat oferoded market share and customer dissatisfaction in
the event of a serious violation. Confident in ourability to navigate these challenges, we remain
steadfast in our commitment to robust and evolving
business ethics and compliance practices, as elaborated in the forthcoming paragraphs.
Policies
Our recently refreshed Code of Conduct stands as
the cornerstone of our responsible business ethos,delineating the conduct LEM anticipates from all
stakeholders across the globe. Complementing thispivotal document are a series of updated policies

designed to offer additional practical guidance in
critical risk domains. These policies, such as theGroup Anti-Bribery and Anti-Corruption Policy, theGroup Labor and Human Rights Policy and the Group
Whistleblowing and Investigation Policy, form a robust suite that reinforces our commitment to ethicalpractices. For a comprehensive overview of all oursustainability-related policies, please refer to ourpolicies table on pages 14–15.
Commitments, goals and measures
At LEM, we have fostered a steadfast culture of ethics and integrity that permeates every aspect of ourorganization. Our unwavering commitment is toconduct our operations in strict adherence to thelaws and regulations of the regions we operate in
and we hold our business partners to the same highstandards. Central to our ethical framework is ourcomprehensive Code of Conduct, crafted to serveas our moral compass. Translated into 11 languages
and recently updated in 2023, this Code offers
guidance for both our employees and business associates on the conduct expected to uphold ourcore values and principles. It includes details on
safeguarding intellectual property and sensitive
business information.
A significant achievement this year was the unveilingof a dedicated intranet page for Legal, IP & Compliance. This centralized hub provides our employeeswith access to a wealth of essential resources, updates and guidelines, essential for navigating the intricate landscape of regulations and safeguarding
our organization's interests. Our Legal, IP & Compliance intranet page categorizes documents into
three distinct sections: policies and procedures,training materials and templates (including those tailored for purchasing, sales and various other functions). This structured approach ensures seamless
access to the precise documents we need, fostering efficiency and promoting seamless compliance.
Another key milestone in 2023 was the enhancement of our Group Whistleblowing and Investigation
Policy. This internal policy outlines our robust andstreamlined internal reporting process, which includes a secure whistleblowing platform. Hosted
and managed by a trusted third-party provider, thisplatform extends its accessibility to all employees
and external stakeholders alike. Offering diverse

45

LEM Sustainability Report 23 | 24

Fostering responsible
business practices

communication tools, including a hotline number
and messaging service, it ensures multiple avenues
for reporting concerns. We also have a web portalon our internet and intranet page from where users
can raise their concerns. To coincide with the updated policy's launch, in early 2024, we initiated acomprehensive awareness campaign across all LEM
sites, highlighting the importance of whistleblowing(see case study on page 47).

Key performance indicators
Upon joining LEM, each employee is required to endorse the Code, symbolizing their personal dedication
to our ethical standards. We are proud that, as of
31 March 2024, we have achieved an impressive 98%
signature rate for the updated version, which waslaunched just two months prior (1% is missing due toemployees on long-term sick or maternity leave).
We also successfully delivered training to 98% of ouremployees on our new whistleblowing processes.

KPI – Business ethics

Units

2023

Code of Conduct signature rate%

98

Training on whistleblowing/business ethics completion rate%

98

Whistleblowing complaints
Number of complaints received

Units

2

% complaints under investigation%0% complaints closed%

100

Convictions
Total number of convictions

Units

1

Total amount of fines for violation of anti-corruption and anti-bribery laws

Units

0

Total number and nature of confirmed incidents of bribery and corruption

Units

0

The number of confirmed incidents in which own workers weredismissed or disciplined for corruption or bribery-related incidents

Units

0

Units

0

Confirmed incidents of bribery and corruption

Payment practices
The number of legal proceedings currently outstanding
during the reporting period for late payments

Plans for 2024
In 2024, we will update our Group Disclosure and Insider Trading Policy alongside our Data Privacy Policy. Additionally, we are in the process of crafting a
new Anti-Trust and Competitive Practices Policy. Our
focus extends beyond mere policy creation; we arecommitted to fostering universal comprehension
and integration of these policies across our diverse

LEM Sustainability Report 23 | 24

46

sites, cultures and positions within the organization.
This concerted effort ensures that our ethical andcompliance standards resonate consistently
throughout our global footprint, reinforcing ourcommitment to integrity and transparency at every
level of our organization. We will also continue toprepare for the upcoming CSRD as well as engage
with relevant sustainability rating agencies.

Case study
Our new whistleblowing process

At the onset of 2024, we introduced ourcutting-edge whistleblowing processcomplemented by our updated Whistleblowing and Investigation Policy.
Aligned with LEM's core values, thispolicy underscores our commitment toinstall ethics at the centre of our corporate culture, prioritizing the welfare,safety and wellbeing of our employees,
business partners and wider public
stakeholders. Applicable across LEM
Holding SA and all of its subsidiaries,
offices and sites worldwide, this policy
extends to every member of our Board of
Directors, executives, officers andemployees, regardless of their geographic location. Moreover, it provides amechanism for any third party to report a
potential breach of LEM’s Code of
Conduct or of any relevant laws andregulations in accordance with the terms
outlined in the policy. This Policy operates in conjunction with LEM's Code of
Conduct and its associated policies,
serving as a comprehensive framework
for ethical conduct across our organization.

The whistleblowing platform is operated by an independent and secure reporting service, ensuringconfidentiality and integrity in the reporting process. Accessible in all languages relevant to LEM's
global operations, this platform is seamlessly integrated into our intranet MyLEM and our corporatewebsite. Any whistleblowing concern can be filed
by telephone, email, letter or web application at:
LEM Whistleblowing Center. For stakeholders who
prefer anonymity, the platform offers the option foranonymous and secure reporting in accordancewith local regulations where permitted. Additionally,
upon request, whistleblowers have the opportunity
for a face-to-face meeting within a reasonable timeframe, ensuring a personalized and supportive approach to addressing concerns.

Communication
campaign on ourstate-of-the-art
whistleblowing
tool.

47

LEM Sustainability Report 23 | 24

Fostering responsible
business practices

Human rights andsustainable supply chains
At LEM, we are unwavering in our dedication to producing current sensors responsibly. Our guiding
principles revolve around upholding human rights
and championing sustainability throughout our supply chain. Our sustainable purchasing program marks
the beginning of a transformative journey. Since its
inception in 2023, we have been diligently laying the
groundwork for a new approach. This initiative evidences our ambition to instil responsible businesspractices not only within our organization but also
throughout our supply chain. We understand the urgency of addressing sustainability challenges. That's
why we are actively collaborating with our suppliers toinfuse sustainability into every facet of our supply chain.
Impacts, risks and opportunities
Our commitment to human rights and sustainablesupply chains extends across all relevant Environment, Social and Governance (ESG) topics. Fromemissions reduction to ensuring fair working conditions, protecting whistleblowers and minimizing
waste, we steadfastly uphold the highest standards
in every aspect of our operations. Our recent double
materiality assessment highlighted conflict minerals
and child labor as crucial topics for our stakeholders
and our business. These are areas where LEM faces
significant exposure to material risks. Failure to address these issues adequately could lead to adverse
impacts on both people and society, as well as potential financial implications for LEM. We are committed to address these challenges head-on. The following sections outline our strategic approach and concrete actions to mitigate risks and drive positivechange in these critical areas.
Policies
In 2023, LEM took significant strides in fortifying its
commitment to labor and human rights by introducing
a new Labor and Human Rights Policy. Our new policy
serves as a cornerstone of our commitment to upholding labor and human rights standards throughout

LEM Sustainability Report 23 | 2448

our operations and supply chain. Furthermore, welaunched our Whistleblower and Investigation Policy
in 2023, underscoring our commitment to fostering aculture of transparency and accountability. We updated our Code of Conduct in 2023, which sets forth the
ethical principles and standards that guide our interactions with stakeholders and inform our businesspractices. Those new and updated policies are basedon international standards such as ILO, OECD and
UNGP. You can find all of our sustainability-related policies in our policies table on pages 14–15.
We also revised our Supplier Manual in 2023 with an
expanded section on sustainability. Our Supplier
Manual articulates our expectations for suppliers
and includes specific commitments such as: promoting fair labor practices and contributing to positive social change in our communities and maintaining the highest standards of corporate governanceand business ethics. All direct suppliers are required
to sign our Supplier Manual and to confirm theircommitment to upholding the standards delineatedin our Code of Conduct.
Commitments, goals and measures
At LEM, we proactively address our impacts, risks
and opportunities to protect human rights and enhance the sustainability of our supply chain. Oursteadfast dedication to sustainable practices underscores our holistic approach as we navigate the intricate balance between commerce and social responsibility. By incorporating rigorous standards,
transparent practices and collaborative measures
we can ensure our growth is robust and sustainable.
We extend our high standards of responsible businesspractices throughout our supply chain. To ensurealignment with our values and expectations, all new
suppliers go through a stringent Procurement Risk Assessment before being approved as a LEM supplier.
This assessment, updated in 2023, includes 19 detailed questions focusing on responsible practices andsustainability across several areas. For example, we inquire about the existence of a due diligence program
to monitor child labor within their own supply chain.
Moreover, as highlighted on page 47, our state of theart whistleblowing platform is publicly available
and easy accessible to all our suppliers, should they
have any issue to raise on human rights, includingchild labor.

Due diligence andtransparency matteraccording to Art. 964j-l CO
Minerals and metals:
In compliance with the Swiss Ordinance on Due Diligence and Transparency, we mapped the minerals
and metals, against the quantities defined in the Annex I of the Swiss ordinance. Our analysis confirmed
that, in 2023, we did not import any materials into
Switzerland above the defined thresholds, thus exempting us from further obligations in Switzerland.
Human rights and child labor
We conducted a gap analysis of our current due diligence process against Swiss Due Diligence andTransparency Ordinance (DDTrO) and internationalguidelines on business and human rights incl. childlabor. This analysis identified priority areas and laid
the foundation for shaping a new and enhanced
due diligence program and risk assessment approach based on international frameworks such as
the OECD and United Nations Guiding Principles on
Business and Human Rights.
Key performance indicators
We continue to strengthen our approach to humanrights and sustainable supply chains. As of now wehave identified the the three KPIs below to monitor.
We have started to undertake internal audits of our
Human Resources function, looking at controls inplace including human rights. As we have just recently updated our new supplier manual and we willbe tracking its signature going forward.

KPI – Human rights and supply chain

Plans for 2024
Our next focus is to ensure that our top 45 direct suppliers, which collectively represent 90% of our direct
supplier spend, sign our newly updated Supplier
Manual and confirm their alignment to our new Codeof Conduct. As part of our commitment to promoting
human rights, we will integrate routine human rights
checks into our existing quality audit processes.
These checks, based on the Procurement Risk Assessment, will enable us to monitor our suppliers'
progress in upholding human rights standards.
Over the next 18 months, we will roll out our roadmap
to enhance our due diligence system to address bothhuman rights (incl. child labor) and minerals and metals issues. This will involve strengthening our Supplier Due Diligence process and enhancing supplier engagement. This has been articulated and formalized
into a Purchasing Strategic Development Plan where
the key components of this roadmap include:– Developing a human rights risk assessment
process aligned with international standards andemerging regulatory requirements identified inour gap analysis.
– Understanding our suppliers' commitment to LEM's
sustainability priorities and encouraging them todevelop improvement plans for key issues such as
reducing GHG emissions (Scope 3) and implementing their own child labor due diligence processes.
– Involving our top 45 direct suppliers, representing
90% of spending, in these initiatives to drive
collective progress.
– Conducting regular follow up of our supplieraction to plan and reassessment of their impact.

Units

2023

Internal audit including human rights topics

Units

2

Number of child labor cases in own operations

Units

0

Number of new supplier manual release signed

Units

0

49

LEM Sustainability Report 23 | 24

Appendices

LEM Sustainability Report 23 | 24

50

Appendix 1: RBI content index
Non-financial matter according
to Art. 964b CO
1.

Response/Reference to LEM material topics

Page reference

Basis of preparation

Reporting principles and standards e report performance on a Group-wide basis. Our reportingWboundaries are defined by financial control as explained by
the Greenhouse Gas (GHG) protocol.

	The majority of the data collecting aligns with our financial
year (1 April 2023, to 31 March 2024) with the exceptionof our waste, energy and GHG emissions data that are
based on a calendar year (January 2023 to December 2023).
If we have any exclusions in our reporting due to data gaps,
then those exclusions are clearly stated.
	We aligned our reporting KPIs to the European Financial Reporting Advisory Group’s European Sustainability Reporting Standards (ESRS) and used a methodology to assess double materiality aligned with the Global Reporting Initiative (GRI) framework.
Reporting scope	LEM Group covering all undertaking LEM has sole control(no joint control).
2.

General aspects

Foreword and signature of the report

Perspectives from the Chairman and CEO

4–5

Description of the business model

What we do and where we operate

7–9

Description of governance

Governance structure

13–15

Description of materiality assessment

Sustainability double materiality

17–21

Description of the main impacts
and risks (based on double
materiality perspective)

Climate change
Waste
Circular economy – resource inflows and outflows

23
28
30

Policies adopted, including thedue diligence applied

Climate change
Waste
Circular economy – resource inflows and outflows

23
28
30–31

Measures taken to implement
policies and assessment ofeffectivenessClimate change
Waste
Circular economy – resource inflows and outflows

23–24
28
31

Key performance indicators

Climate change
Waste
Circular economy – resource inflows and outflows

24–26
28
31

3.

4.

Environmental matters

Social matters

Description of the main impacts
Own workforce – working conditions consumer information
and risks (based on double
materiality perspective)		

36

Policies adopted, including the
Own workforce – working conditions consumer informationdue diligence applied		36

Measures taken to implement
Own workforce – working conditions consumer information
policies and assessment ofeffectiveness		

36–37

Key performance indicators

37

Own workforce – working conditions consumer information

51

LEM Sustainability Report 23 | 24

AppendicesNon-financial matter according
to Art. 964b CO

Response/Reference to LEM material topics

Page reference

Description of the main impacts
and risks (based on double
materiality perspective)

Own workforce – working conditions

36

Policies adopted, including thedue diligence applied

Own workforce – working conditions

36

Measures taken to implement
policies and assessment ofeffectivenessOwn workforce – working conditions

36–37

Key performance indicators

Own workforce – working conditions

37

Description of the main impacts
and risks (based on double
materiality perspective)

Business ethics

45

Policies adopted, including thedue diligence applied

Business ethics

45

Measures taken to implement
policies and assessment ofeffectivenessBusiness ethics

45–46

Key performance indicators

Business ethics

46

Description of the main impacts
and risks (based on double
materiality perspective)

Human rights and sustainable supply chain

48

Policies adopted, including thedue diligence applied

Human rights and sustainable supply chain

48

Measures taken to implement
policies and assessment ofeffectiveness

Human rights and sustainable supply chain

48–49

Key performance indicators

Human rights and sustainable supply chain

49

4.

5.

6.

Employee-related matters

Combating corruption

Respect for human rights

Due Diligence and Transparency Ordinance according to RBI-DDTrO Art. 964 j-l CO
7.

Minerals and metals

Minerals and metals
8.

52

49

Human rights and sustainable supply chain

49

Child laborChild labor

LEM Sustainability Report 23 | 24

Human rights and sustainable supply chain

Appendix 2: LEM ESG rating summary
ESG rater and score 		

Score Bronze
Range: no medal to platinum

Description				Year

Ecovadis is a provider of business sustainability ratings.
We have completed their assessment process and received
a bronze medal. EcoVadis Medals are awarded to the top
35% of companies assessed by EcoVadis. We are currently
in the process of submitting our 2024 assessment.
2021

CDP is a not-for-profit charity that runs the global disclosuresystem to manage companies’ environmental impacts.
We have completed the CDP Climate Change questionnaireand received a “C” rating for awareness.

2023

Morningstar sustainalytics provides analytical ESG
research, ratings and data to institutional investors
and companies.
In 2023, LEM received an ESG rating of 13 and wasassessed by Morningstar Sustainalytics to be at low risk ofexperiencing material financial impacts from ESG factors.

2023

The UNGC is a global corporate sustainability initiative.
We have been a signatory of the UNGC since 2006. As partof this, we have committed to submit a Communication on
Progress (CoP) questionnaire.

2023

Score C
Range: A to D and F

Score 13
Range: 0 to 40+

Communication on Progress	on the ten principles submitted
Range: no range

53

LEM Sustainability Report 23 | 24

Appendices

Appendix 3: Summary data table

LEM Sustainability Report 23 | 24

KPI

Unit

2023

Countries operating in

Units

17

2022

ESRS

Notes

S1

Refer to pages 8–9 forlist of countries

Renewable electricity split

%

87

37

E1

Global energy consumption

kW/h7,082,493

7,453,864

E1

Global energy consumption
from fossil fuelkWh821,794

3,921,237

E1

Global energy consumption
from nuclearkWh85,433451,941

E1

Global energy consumption
from renewablekWh6,175,266

2,778,418

E1

Global energy consumption
intensity

kWh /CHF

0.017

0.018

E1

Global Scope 1

tCO2e

172

39

E1

Global Scope 2 (location-based)

tCO2e

2,434

2,420

E1

Global Scope 2 (market-based)

tCO2e

623

4,066

E1

Global Scope 3

tCO2e

192,045

100,454

E1

Category 1: Purchased Goods
and Services

tCO2e73,217

E1

Category 2: Capital Goods

tCO2e

2,667

E1

Category 3: Fuel- andEnergy-Related Activities
Not Included in Scope 1 or Scope 2
(NEW)

tCO2e

184

E1

Category 4: Upstream
Transportation and Distribution

tCO2e

36,621

E1

Category 5: Waste Generated
in Operations

tCO2e

48

E1

Category 6: Business travel

tCO2e

2,053

E1

Category 7: Employee Commuting

tCO2e

1,460

E1

Category 8: Upstream Leased
Assets (NEW)

tCO2e

0

E1

Category 9: Downstream
Transportation and Distribution

tCO2e

217

E1

Category 10: Processing of
Sold Products

tCO2e

n/a

E1

Category 11: Use of Sold Products
(NEW)

tCO2e

75,270E1

Category 12: End-of-Life Treatment
of Sold Products (NEW)

tCO2e

308

E1

Category 13: Downstream
Leased Assets (NEW)

tCO2e

0

E1

Category 14: Franchises

tCO2e

n/a

E1

Category 15: Investments

tCO2e

n/a

Global Scope 1 and 2(location-based)

tCO2e

2,606

2,459

E1

Global Scope 1 and 2(market-based)

tCO2e

796

4,105

E1

Global Scope 1, 2
(location-based) and 3

tCO2e

194,651

102,913

E1

54

E1

2022 data is not comparable to 2023 as we havesignificantly expanded thescope of the data collected and improved data quality. We have added moresites in 2023 for our
Scope 1 and 2 emissions,
we have added five new
Scope 3 categories (category 3, 8, 11, 12 and 13) and
we have improved
robustness of our
methodology and datacollection for othercategories (e.g Scope 3
category 1).

KPI

Unit

2023

2022

ESRS

Global Scope 1, 2
(market-based) and 3

tCO2e

192,841

104,559

E1

Global Scope 1, 2 (location-based)
and 3 CO2e intensity

gCO2e/product

2,767

1,497

E1

Global Scope 1, 2 (market-based)
and 3 CO2e intensity

gCO2e/product

2,741

1,521

E1

gCO2e/revenue

480

253

E1

Global Scope 1, 2 (market-based)
and 3 CO2e intensity

gCO2e/revenue

475

257

E1

Total amount of waste generated forthe group

tonnes

357

529

E5

Active users of Linkedin learningat the end of March 2024

%

74

S1

Linkedin learning hours completed

Hours> 6,000

S1

Global Scope 1, 2 (location-based)
and 3 CO2e intensity

Total hours of learning completed

Hours

18,800Global voluntary turnover rate

%

6

Notes

S1
7

S1

EEA collective bargaining coverage

%

44

S1

Non-EEA collective bargaining
coverage%0

S1

EEA social dialogue coverage(employee representatives)

%

92

S1

Non-EEA social dialogue coverage(employee representatives)

%

0

S1

Percentage of DL that participatedin regular performance

%

90

S1

Percentage of IDL that participatedin regular performance and careerdevelopment reviews

%

100

S1

Under 30 years old

%

11

S1

31–50 years old

%

73

S1

Above 51 years old

%

16

S1

Total number of permanent
employees

Units

1,553

S1

Female employees

%

49

54

Male employees

%

51

46

Total number of Executive
Committee members

Units

7

S1

Female members of the
Executive Committee

%

14

S1

Male members of the
Executive Committee

%

86

S1

Total number of senior leadersmanagement employees

Units

24

S1

Female employees in
top management

%

17

S1

Male employees in
top management

%

83

S1

Refer to page 39 forfurther age and genderbreakdown

S1
S1

55

LEM Sustainability Report 23 | 24

Appendices

LEM Sustainability Report 23 | 24

KPI

Unit

2023

The total number of non-employee
workers in own workforce (TEMP
agency)

Units

213

2022

ESRS
S1

LEM Group direct labor

%

40

S1

LEM Group indirect labor

%

60

S1

The number of work-related
fatalities (by employees, by
non-employees and by otherworkers working on site)

Units

0

S1

The number of recordable
work-related accidents (byemployees and non-employees)

Units

5

S1

The rate of recordable workrelated accidents (by employees
and non-employees)

0.30
Total number ofaccidents/working
1
hours x 200,000

S1

The number of recordable workrelated inccidents (by employees
and non-employees)

Units

S1

The rate of recordable workrelated inccidents (by employees
and non-employees)

0.30
Total number ofaccidents/working
hours x 200,0001

S1

The number of days lost to
work-related injuries, accidents,
fatalities and ill health (byemployees and non-employees)

Units

S1

8

95

Code of Conduct signature rate

%

98

S1

Training on whistleblowing/business ethics completion rate

%

98

S1

Number of whistleblowing
complaints received

Units

2

S1

% complaints under investigation

%

0

S1

% complaints closed

%

100

S1

Total number of convictions

Units

1

G1

Total amount of fines forviolation of anti-corruption
and anti-bribery laws

Units

0

G1

Total number and nature ofconfirmed incidents of bribery
and corruption

Units

0

G1

The number of confirmed incidents
in which own workers weredismissed or disciplined forcorruption or bribery-related
incidents

Units

0

G1

The number of legal proceedings
currently outstanding during thereporting period for late payments

Units

0

S2

Internal audit incl. human rights
topics

Units

2

S2

Number of child labor cases in own
operations

Units

0

S2

Number of new supplier manual
release signed

Units

0

S1

56

Notes

Appendix 4: List of acronymes
Acronyms

MeaningAC	Alternative Current
BoD

Board of Directors

CO2e

CO2 equivalent

CoC

Code of Conduct

DEI

Diversity, Equity and InclusionDL

Direct Labor (production line operator)

DMA

Double Materiality Assessment

EACs

Energy Attribute Certificates

EEA

European Economic Area

EMS

Environment Management System

ESG

Environment, Social, Governance

ESRS

European Sustainability Reporting Standards

EU CSRD

European Union Corporate Sustainability Reporting Directive

EV

Electric Vehicle

GHG

Greenhouse Gas

HVAC

Heating, Ventilation and Air-Conditioning

IDL

Indirect Labor

ILO

International Labor Organization

IPIntellectual Property

LCA

Life Cycle Assessment

MRI

Magnetic Resonance Imaging

OECD

Organisation for Economic Co-operation and Development

OLCI

Open Loop Coreless Integrated

PCB

Printed Circuit Board

PCF

Product Carbon Footprint

PEP

Product Environment Profile

R&D

Research and Development

RBI-DDTrO

Swiss Responsible Business Initiative Due Diligence and Transparency Ordinance

REACH

Registration, Evaluation, Authorisation and Restriction of Chemicals

RoHS

Restriction of Hazardous Substances

SASB

Sustainability Accounting Standards Board

STEM

Science, Technology, Engineering, Mathematics

UNGC

United Nations Global Compact

UNGP

United Nation Guiding Principles

57

LEM Sustainability Report 23 | 24

Copyright© LEM HOLDING SA,
GenevaConcept and text
LEM HOLDING SA, Geneva
Carnstone Partners Ltd, London
Dynamics Group, Zurich
Process AG, Zurich
DesignProcess AG, Zurich
PhotosGetty images
Printing
Druckprodukt, Zurich

LEM HOLDING SA
Route du Nant-d’Avril 1521217 Meyrin
Geneva, Switzerland
www.lem.com