Making sustainability a reality

2022
Sustainability ReportDriving real sustainablechangeThe key challenge for companies today – regardless of if
they operate within energy, transportation, construction,
manufacturing, automotive or aerospace – is that any
change must be sustainable. Focusing solely on improving
competitiveness without consideration of environmental andsocial impacts is no longer an option.
Despite the urgency and short window of opportunity to takeclimate action, many of the sustainability commitments andinitiatives of nations and industries are still forward-looking
undertakings, with promises of change that will take place in the
future. But that is too late.
At Hexagon, we are not waiting to make a difference: we are driving
sustainable change with tangible impact and outcomes today.
Our portfolio of digital reality solutions is making entire industries
and nations more efficient, with significantly reduced emissions,minimised waste and improved safety for citizens and employees,
every hour and every day.
Sustainable change is a key driver of growth and tightly linked toour success as a company, and we are proud to call ourselves anenabler of sustainability.

01
02
03
04
05
06

Sustainable business
STRATEGY

Solutions for the future
STRATEGY

People and culture
STRATEGY

Enabling change with consciousness

5

13

27

30

Governance37

The numbers

49

2

Letter from the President and CEO
Powerful forces continue to alter the world as we know it. Recent years have beenmarked by war, sanctions, disrupted supply chains from lockdowns, extreme shortagesof minerals and components, escalating energy prices, raging inflation and growing
concerns about the world’s carbon capture and storage dilemma.
Amidst all this turbulence, I stepped into
the role of president and CEO of Hexagon,
and I am proud to report that our company
is very well-suited to weather these kindsof structural shifts in the market. We arecertainly a company that has proven it can
thrive during change.
We are also well-equipped to leadthe transformation of entire businessecosystems to help customers andindustries face these challenges headon. Take energy, for example. Here, thechallenges are countless and the solutions
urgent. The industry is struggling to quickly
and profitably transition to renewables andclean energy, electrify the transportation
sector and adequately source the criticalminerals necessary to meet the demands ofthe green power revolution. But that’s only
half the battle. The same companies mustalso work simultaneously to ensure thatexisting power grids, oil and gas facilities
and pipelines are properly maintained
and protected to run smoothly – without
shutdowns, leakages or accidents. This
report showcases actual examples ofHexagon’s robust portfolio at work,
enabling customers to adapt and manage
these transitions.
Hexagon’s products are at the core oftransformational change in many otherindustries, the most prominent being
automotive, aerospace, construction,
manufacturing, agriculture and mining.
Every day, our unique combinationsof sensors, software and autonomous
technologies are reshaping ecosystems
to produce higher-quality outputs whilerunning more efficiently, productively andsafely. The result is fewer inputs, lesswaste, lower emissions and reduced risk –creating industries that are not only

Hexagon’s productare at the core oftransformational change inmany other industries.”
profitable but also contribute to thesustainable change our world sodesperately needs.
While Hexagon’s most significant contributionis accelerating the sustainable journey of ourcustomers through the use of our products,
we’re also heavily focused on our own actions
and operations and made great strides in
2022 toward reaching our goals.
On the carbon side of the equation, we
have joined the Business Ambition for 1.5°C
and pledged to set science-based targets
3around our emissions – demonstrating
our concrete commitment to driving
change that will benefit the entire planet.
On the product innovation side, we
further developed our Life Cycle Analysis
framework, which aids in understanding
the cradle-to-grave environmental footprintof our key solutions and how to best
apply eco-design criteria in the innovation
process. We also successfully executed apilot project to track the transport footprintof products in one of our businesses. As
a result, we were able to decrease theamount of polypropylene used in productpackaging by more than 90%, an outcome
we look forward to expanding across thecompany. We are also still on track to meetour goals of conducting sustainability audits
across 100% of our risk suppliers by 2023,
ensuring our entire value chain lives up to
the high standard of ethics, governance andsustainable operations that we adhere to.
On the environmental reporting side, wereported to the Carbon Disclosure Project(CDP) – the global disclosure system forinvestors, companies, cities, states andregions to manage their environmental
impacts – increasing our transparency to all
stakeholders.

To further support and encouragesustainable innovation, we continued
to invest in the future of R-evolution,
the sustainable innovation and greentech investment subsidiary of Hexagon.
R-evolution has proven it’s possible topositively impact the environment while
generating profitable business growth.
In 2022 it launched a venture capital arm
to boost green-tech start-ups, callingon entrepreneurs to tackle climate
emergencies together.

Together we candeliver on the promiseof sustainable value
creation at scale.”

To conclude, Hexagon is currently in aunique position to drive real, sustainablechange across the world – for ourcustomers and in our own operations andsupply chain – thereby contributing tosustainability everywhere we do business.
Together we can deliver on the promise ofsustainable value creation at scale. We arejust getting started, and whether you are avalued shareholder, customer or employee,
we thank you for being part of our journey.

Paolo Guglielmini
Hexagon President and CEO

4

01 Sustainable business

02 Solutions for the future
STRATEGY

01

03 People and culture
STRATEGY

04 Enabling change with consciousness
STRATEGY

05 Governance

06 The numbers

Sustainablebusiness
Hexagon’s primary contribution to a sustainable future is through our technology
solutions. By leveraging our broad product portfolio and competencies, Hexagon
generates sustainable value in almost all industries and regions around the world.

5

01 Sustainable business

02 Solutions for the future
STRATEGY

03 People and culture
STRATEGY

04 Enabling change with consciousness
STRATEGY

05 Governance

06 The numbers

Hexagon in brief

Hexagon has long been a leader in delivering Smart Digital
Realities™ that require real-time and autonomous data
capture, analysis and visualisation. We integrate real-world
sensor inputs with software systems built to analyse, predict
and act – in real time and autonomously – to create new andbetter realities that address uncertainty and enable resilientorganisations, teams and workflows.
Our digital reality solutions enable customers to harness
the rapidly-increasing amounts of data, putting it to work
to boost efficiency, productivity, quality and safety acrossindustrial, manufacturing, infrastructure, public sector andmobility applications.

At our very core is a powerful vision of a future where data
is fully leveraged so that business, industry and humanity
sustainably thrive. This is our North Star, our guiding
principle: that people and the planet can sustainably thrive
only when industry and business prosper.
Our goal is to empower our customers with the freedom
to use data to its greatest potential – the freedom toinnovate, the freedom to thrive, the freedom to ensurea sustainable planet for future generations.

North
Star:

Respect forpeople, planet
and profit

6

01 Sustainable business

02 Solutions for the future
STRATEGY

03 People and culture
STRATEGY

04 Enabling change with consciousness
STRATEGY

05 Governance

06 The numbers

Business overview
Geospatial Enterprise Solutions

Industrial Enterprise Solutions

Geospatial Enterprise Solutions (GES) includes a leading
portfolio of reality-capture sensors – from laser scanners,
airborne cameras and unmanned aerial vehicles (UAV) tomonitoring equipment, mobile mapping technologies andprecise positioning. The sensors are complemented bysoftware to create 3D maps and models, which are used
for decision-making in a range of software applications,covering areas such as surveying, construction, public
safety and agriculture.

Industrial Enterprise Solutions (IES) includes a l­ eading
portfolio of manufacturing solutions incorporating
the latest metrology sensor technology for fast andaccurate measurements. These solutions include
technologies such as coordinate measurement machines(CMM) and laser trackers and scanners for optimising
design, processes and throughput in manufacturing
facilities as well as computer-aided design (CAD),
computer-­aided manufacturing (CAM) and computer-­aided engineering (CAE) software. Solutions within thissegment also include software for optimising design,
improving productivity and creating and leveraging
asset management information through the lifecycle ofindustrial plants and process facilities.

The segment comprises the following divisions

The segment comprises the following divisions

Employees per business,average share■ Industrial Solutions, 56%■ Geospatial Solutions, 43%■ Corporate function, 1%

Employees per region,
average share■ EMEA, 38%■ Asia, 32%■ Americas, 30%
Geosystems

Safety, Infrastructure& Geospatial

Autonomy &Positioning

ManufacturingIntelligence

Asset Lifecycle
Intelligence7

01 Sustainable business

02 Solutions for the future
STRATEGY

03 People and culture
STRATEGY

04 Enabling change with consciousness
STRATEGY

05 Governance

06 The numbers

Technology and capabilities to support sustainability
Putting data to work to empower an autonomous, sustainable future is in our DNA, enabled by five core competencies:(1) reality capture (2) positioning (3) location intelligence (4) design and simulation and (5) autonomy. These core competencies add
up to perhaps the most dynamic and powerful use of data in history: the Smart Digital Reality™. This is what Hexagon aims to deliverwith every solution we provide. It is Hexagon’s strategic advantage and the greatest source of value for our customers.

Reality-capture solutions

Design and simulation
capabilities

Hexagon’s reality-capture
technologies enable the digital
capture of the real world – fromdistance measurements (point A
to point B) to attributes of physicalworld objects (e.g., auto parts) tothe creation of entire physical world
environments in 3D (e.g., complete
infrastructure of a city).

Autonomous capabilities

Real world
Positioning technologies
Hexagon’s positioning technologies
enable the location, tracking,navigation and/or control ofanything, anywhere. Powering
intelligent positioning ecosystems
in vital industries and safety-of-life
applications.

Hexagon’s design and simulation
capabilities replicate real-world
scenarios in virtual environments –from manufacturing and assembly
processes to autonomous driving.

Hexagon’s autonomous technologies
provide the ability to “autonomise”
any task or process in a workflow toan entire operation or industry (e.g.,mobility/transportation – in whichcars, UAVs, industrial vehicles, trains,vessels and more can operate safely,
securely, reliably and efficiently
thanks to assured autonomy andpositioning).

Digital twin
Location intelligencecapabilities

Hexagon’s location intelligencecapabilities enable active,
georeferenced and situational
intelligence for any application,
providing businesses andgovernments with unlimited potential
to incorporate high-definition,
real-time, dynamic maps into theirdecision-support systems.

8

01 Sustainable business

02 Solutions for the future
STRATEGY

03 People and culture
STRATEGY

04 Enabling change with consciousness
STRATEGY

05 Governance

06 The numbers

Hexagon snapshot

Innovation

Relevancy

Stability

Sustainability• 10–12% of revenues for R&D• Serving manufacturing,
infrastructure, construction, city
services and more• €500mn (2000) to €5.2bn (2022) inrevenues• Committed to driving profitablebusiness value that ensureseconomic growth, but not at theexpense of the planet or peopleat scale• More than 5,000 R&D employees• Thousands of active patents• Complementary emerging techthrough acquisitions–180+ in 22yrs

that is vital• Solutions that drive fewer inputs,
less waste and less pollution to
support efficiency, productivity,
quality and safety gains

that is proven• More than 24,000 employees
across 50 countries

integral to our strategy• Increasing role in customers’
businesses

901 Sustainable business

02 Solutions for the future
STRATEGY

03 People and culture
STRATEGY

04 Enabling change with consciousness
STRATEGY

05 Governance

06 The numbers

Hexagon core values

Profit-driven
We value sustainableprofitability, performanceover procedure, setting
measurable goals andworking collectively toachieve our financial targets.

Entrepreneurial
We’re confident we havewhat it takes to achieve ourambitious vision. We takeownership in dreaming big,
trying new things and pushingfor progress.

EngagedWe seek personal fulfilment
by doing great work while
enjoying what we do.
We lead with a sense ofurgency, without prejudiceor politics.

Professional
We are honest professionals
who understand theimportance of knowing
our business, leading by
example and demonstrating
humility along the way.

Innovative
We invest heavily ininnovation to meet ourcustomers’ ever-changing
needs, with laserlike focus on creating
sustainable businesses
that benefit humanity.

Customer-focused
We know our customers’
success is paramountto our own, and we arededicated to driving
efficiency, productivity
and quality for everyone
we serve.

10

01 Sustainable business

02 Solutions for the future
STRATEGY

03 People and culture
STRATEGY

04 Enabling change with consciousness
STRATEGY

05 Governance

06 The numbers

Sustainability – an integral part of our strategy
Strategy
VisionA future where data isfully and autonomously
leveraged so thatbusiness, industry
and humanity
sustainably thrive.
MissionPutting data to work to
enable autonomous,connected ecosystems
that boost efficiency.
productivity, quality
and safety for ourcustomers.

Hexagon supports
the UN Sustainable
Development Goals.”Through offering transformative
solutions for the future
Hexagon’s primary contribution toa sustainable future is through oursolutions. With 24,000 employees
based in 50 countries, we deliver
scalable and sustainable solutions
across a vast array of industries –ranging from manufacturing andconstruction to agriculture, powerand ­energy.
By leveraging our broad productportfolio and competencies, Hexagon
generates sustainable value in almost
every industry and region throughout
the world.

Through its people and culture
Hexagon’s employees are our single
greatest asset for securing longterm competitiveness and continued
innovation. Hexagon is committed
to a diverse workplace, mirroring
our international nature – with
employees, customers and suppliers
across the world.
With an approach focused oncompetence development, diversity
and inclusion, employee engagement
and health and safety, Hexagon canremain competitive with its peers,
regardless of where it operates.

Through consciousness in its
internal oper­ations, supply chain
and social ­engagements
Hexagon seeks to positively
impact the environment by acting
sustainably and addressing
environmental challenges throughour internal operations and value
chain. By upholding high standardsof ecologically sustainable
processes, Hexagon supports
activities that aim to reduce ourenvironmental footprint, better
meet customer requests, generatesavings, mitigate environmental
risks and fuel innovation.

11

01 Sustainable business

02 Solutions for the future

03 People and culture

STRATEGYSTRATEGY

04 Enabling change with consciousness

05 GovernanceActions

Highlight KPIs

STRATEGY

06 The numbers

Our goals and commitments
Focus areas

Commitment

Goals

Through offering transfor­mative solutions for the future
Enabling sustainable
development throughHexagon’s solutions• Making smarter use of the earth’s resources by
unleashing data to do its greatest work – boosting
efficiency, productivity, quality and safety.
• Supporting customers and society in their sustainability
journey.

• Implement sustainability assessment in thestrategy and business planning process.
• Increase investments in solutions for eMobility,
renewable energy and safety.

Through its people and culture
Driving sustainability
through our culture• Ensuring health and safety for our employees.
• Creating an inclusive culture with a diverse workforce,and not tolerating discriminatory structures in theorganisation.
• Being an attractive employer and recruiting the best andmost professional employees.

• Achieve at least 30% women inleading positions by 2025.

• Implement gender diversity criteria in the
recruitment process.
• Implement training in diversity and inclusion for all
employees.

• Management split by gender, male/
female in 2022: 77/23%

Through consciousness in its internal oper­ations, supply chain and social e­ ngagements
Operating sustainably
to improve our own
environmental footprint• Reducing greenhouse gas emissions, waste, stress ofwater and air in our operations and supply chain.
• Please see full list of commitments at
hexagon.com/sustainability• Become carbon neutral in our
scope 1 and 2 emissions by 2030.
• Become carbon neutral in our
entire value chain (scope 1, 2 and 3)
by 2050.
• Carbon targets in line with the NetZero Standard under development.

• Implement an environmental management systemin our major production facilities.
• Implement a company car framework with
objectives to reduce GHG emissions• Increase share of renewables in energy mix.
• Joined the Business Ambition for 1.5°C and willdefine net-zero science-based targets for carbon
emissions• Renewable energy share in 2022: 34.8%

Driving sustainability
in our supply chain• Ensuring that all suppliers adhere to the Hexagon
Supplier Code of Conduct.
• Deploying best efforts around responsible business anddue diligence of its suppliers.
• Ensuring that all suppliers undertake due diligencewithin their own supply chains.

• Conduct sustainability supplieraudits on 100% of its key direct
suppliers in risk areas by 2023.

• Conduct routine supplier risk assessments andsustainability supplier audits.
• Train employees and suppliers in their respective
Codes of Conduct.
• Document the source of origin of the minerals in allcomponents.

• Audited key suppliers in risk countries in
2022: 19.6%

Engagements that
support societal
challenges• Engaging in societal development issues where Hexagon
can make the greatest impact.

• Implement a CSR programme focused on
environment, education, innovation and diversity.
• Partnership with Cool Earth12

01 Sustainable business

02 Solutions for the future
STRATEGY

0203 People and culture
STRATEGY

04 Enabling change with consciousness
STRATEGY

05 Governance

06 The numbers

Solutions forthe future

STRATEGY

Hexagon is an enabler of a sustainable future, providing solutions that address themain environmental and social challenges that companies and nations face today
and tomorrow.

13

01 Sustainable business

02 Solutions for the future
STRATEGY

03 People and culture
STRATEGY

04 Enabling change with consciousness
STRATEGY

05 Governance

06 The numbers

Our solutions enable change
There is not a business, an industry or
geographic region that is unaffected by
the struggle to tackle the environmental
and social challenges of the 21st century.
This is why Hexagon’s technologies andcapabilities are becoming increasingly
relevant in creating sustainable businesspractices that in turn do good for society
and the planet at large. Every day,Hexagon solutions are shaping urban andproduction ecosystems to become moreconnected and autonomous. Unique
combinations of sensors and softwareare leveraging automation, AI and othertechnologies to put data to work in waysthat enable more efficient processes
and improved decision-making. The
result is fewer inputs, less waste,
reduced emissions, increased safety andbetter preparedness – making entire
industries more sustainable. Three
examples of sustainability use cases ofHexagon solutions:increase efficiency throughout the
lifecycles of products manufactured
in almost every industry. Throughsimulation tools that virtually test
materials, measuring instruments that
correct processes and optimisation
solutions that streamline operations,customers can reduce resource inputs,
emissions and waste, thus lowering theenvironmental impact.

1. Lowering environmental impact inmanufacturing and construction
Hexagon’s design and engineering,production and metrology solutions

3. Protecting lives
Hexagon’s AI-driven surveillancetechnology can issue real-time warnings
in the event of avalanches, collapsed

2. Monitoring of natural resources
Nations, organisations and researchers
rely on Hexagon’s advanced geospatial
technology to monitor, visualise andanalyse changes to our planet.
Deforestation, flooding, wildfires, melting
glaciers and other global warming
effects are visualised and reported on inreal time thanks to Hexagon’s solutions,providing the information necessary tocall for and inspire change in consumer
consumption and behaviour.

Hexagon’s technologies
and capabilities are
becoming increasingly
relevant in creating
sustainable businesspractices.”14

01 Sustainable business

02 Solutions for the futuredams, landslides or blocked railways and roads.
Operational safety solutions assist in everythingfrom avoiding collisions to monitoring operator
alertness in critical processes like power andmining. At the same time, dispatch solutions
for police, ambulance and firefighters ensure
worker and citizen safety all over the world.
Innovation and acquisitions driving growthof sustainability solutions
The key to Hexagon’s innovative solutions is astrong focus on research & development (R&D),
with annual investments of about 10–12% of
net sales. Hexagon employs more than 5,000
people working in R&D, and owns approximately
4,000 active patents. During 2022, one
important innovation was the next-generation
Leica BLK360, which dramatically advances
reality capture by delivering two of the mostsought-after necessities: speed and efficiency.
The new BLK360 can create a foundation forthe development of data-driven digital twins inseconds or minutes. Like its predecessor, the
new BLK360 encourages new users to introduce

STRATEGY

03 People and culture
STRATEGY

04 Enabling change with consciousness
STRATEGY

05 Governance

06 The numbers

reality capture to new industries and markets
due to its speed, portability and ease of use.
The efficiency gains support sustainability in awide range of industries, from construction andarchitecture to city planning.
In addition, acquisitions play a vital role instrengthening Hexagon’s solutions portfolio.
Over the past 22 years, Hexagon has completed
more than 170 acquisitions to fill gaps in its
portfolios, augment its R&D roadmaps and add
domain expertise, ensuring that the best-inclass solutions to face tomorrow’s challenges
are available to its customers.

Acquisitions play a vitalrole in strengthening
Hexagon’s solutions
portfolio.”

During 2022, important acquisitions included
ETQ, iConstruct, AVVIR and Innovatia
Accelerator – all strengthening Hexagon’s smart
digital reality capabilities supporting Hexagon’s
position as an enabler of sustainable change.
Practical use cases that explore how
Hexagon solutions supported sustainability
in 2022 are available on page 19–26.

15

01 Sustainable business

02 Solutions for the future
STRATEGY

03 People and culture
STRATEGY

04 Enabling change with consciousness
STRATEGY

05 Governance

06 The numbers

Enabling transformation in the energy sector
Hexagon’s solutions play an important role in driving sustainability in almost every major industry. One example of a sector
going through significant change is energy, where Hexagon is a vital factor in the transformation of six key areas:
Power grids

Electrification of transportation

Challenge: As the need for safe and clean energy
is increasing on a global scale, the electric utilities
throughout the world are struggling to manage their
networks and services to ensure reliability, customer
satisfaction and regulatory compliance while meetingthe capacity needs of the future.

Challenge: Transport accounts for around one-fifthof global carbon dioxide emissions, with the majority
stemming from passenger cars and medium and heavy
trucks. An electrification of the vehicle fleet will reduce
emissions, but limitations of batteries and drivetrains
together with high production costs hinder thedevelopment, and ensuring ethical sourcing of minerals
is crucial.

Solution: Hexagon provides location-based informationand capabilities to support network planning, operations
and maintenance, service restoration, safety andsecurity and more, enabling utility providers to maintainand expand their network capacity.

Solution: Hexagon’s design, engineering andmanufacturing technologies touch more than 75%
of vehicles produced today, from optimising theefficiency of new electric vehicle powertrain design andproduction to quality-inspecting new range-boosting
batteries. Also, Hexagon’s simulation, production andinspection solutions are helping to develop the next
generation of fuel cells. From thermal modelling to help
modify cooling systems for effective operation with
fuel cells, to case production to ensure safety of thisnew technology in the event of an accident, Hexagon’s
technology provides data to help accelerate innovation.

Read more here. →Smart cities
Challenge: Population growth and urbanisation in
combination with climate change are putting city
planners in a position where they quickly need to
expand city areas and build new housing, while also
ensuring the new projects are energy efficient, adapted
to environmental change and lower the stress on theenvironment.

H2

Read more here. →Solution: Hexagon’s Content Program offers aerial
imagery, elevation data and 3D models of cities aroundthe world that enable insightful, data-driven decisions.
City planners can simulate and communicate scenarios,
enabling them to plan the optimal design of green
spaces and to decrease the temperature on warm days,
reducing a city’s carbon footprint by lowering the needs
for cooling energy in buildings.
Read more here. →16

01 Sustainable business

02 Solutions for the future
STRATEGY

03 People and culture
STRATEGY

04 Enabling change with consciousness
STRATEGY

05 Governance

06 The numbers

Renewables and green hydrogen

Rare earth minerals

Challenge: Almost all nations and industries aretransitioning from carbon-based energy production
into renewables. The marketplace is challenged bydemands to ramp up renewable projects quickly, andhow to maximise the energy output from the existing
power generators.

Challenge: The demand for rare earth
elements has increased significantly in thepast decades with the entry of green andadvanced technologies. The supply and miningof the necessary minerals have however notscaled accordingly, and electric cars and windplants require more rare earth elements thanconventional. Hence the output per mine andproject needs to increase to meet the needs.

Solution: Visualisation platforms combined with groundand mobile sensors can applied to operate and expand
the output of solar and wind parks, and to actively,
remotely and autonomously monitor to aid inspections,quickly detect panel anomalies and improve targeted
maintenance. Hexagon’s asset management solutions
are also used in support of the global green hydrogen
revolution: by providing an integrated digital twin
platform for infrastructure developers who will manage
every stage of the asset lifecycle – from engineering anddesign through finance, construction and operation –Hexagon improves efficiency and reduces risk.

Solution: Hexagon’s full mining lifecycle solutions– from planning, operations and safety toenterprise intelligence and reclamation – enablescalable and sustainable operations acrossthis vast and critical ecosystem, ultimately
extracting a mine’s total value while protecting
lives. Hexagon’s approach to smart mining is
empowering mines to do more with less, and to do
it sustainably by improving safety and increasing
efficiency, productivity and profitability – allwhile accelerating the mine’s journey to carbon
neutrality. Read more here. →Read more here. →Oil and gas
Challenge: While oil and gas is not a part of a green
future, it still remains an important energy source foryears to come during the transition to carbon-freeenergy. During the transformation, operations need
to be closely monitored and maintained in order toavoid unnecessary downtime, incidents or leaks withpotentially disastrous effects on the environment.
Solution: Hexagon’s comprehensive solution portfolio
works across the oil and gas supply chain delivering
information, insights and tools to help increase safety,
improve OT/ICS cybersecurity, build operational
resiliency and increase productivity. The software
solutions help transform unstructured information intoa smart digital asset to visualise, build and manage
structures and facilities of all complexities, ensuring
safe and efficient operation throughout the entire
lifecycle. Read more here. →H2

17

01 Sustainable business

02 Solutions for the future
STRATEGY

03 People and culture
STRATEGY

04 Enabling change with consciousness
STRATEGY

05 Governance

06 The numbers

R-evolution – Hexagon’s strategic
sustainability business venture
To establish a beachhead in the fast-growing green-tech digitalsolutions space, Hexagon launched the strategic businessventure R-evolution in 2021.
The company is running profit-driven
investments in green tech projects, andaccelerates the world’s transition tosustainability by applying Hexagon and partner
technologies on business opportunities that
benefit the environment and society. Since
its launch, the R-evolution portfolio has
been expanded to include construction andoptimisation of a solar farm in Spain with
40,000 panels and a capacity of 16.4 MWp, ablue-carbon ecosystem initiative in Bahamas
and green hydrogen digitalisation in Australia.
By applying Hexagon hardware and software
solutions, including visualisation platforms
and sensors into each area, R-evolution aims
to increase efficiency and profitability of each
initiative to enable technical blueprints for
greater impact and scale globally. Saving theplanet is the biggest business opportunity of
the 21st century, and solar, blue carbon andgreen hydrogen are just the beginning.

A key milestone in 2022 included the launch of
the R-ventures programme, which aims to help
the green-tech startup ecosystem accelerate
its next breakthroughs through seed funding
or in-kind technology from Hexagon’s portfolio.
Considerations for R-ventures’ monetaryinvestments or in-kind technology require
green-tech startups to be in the pre-IPO funding
stage, with an identified product and initial
customer base. In 2022, R-ventures invested inthree start-ups.
Another important step for R-evolution was a
new partnership with Google, where R-evolutionis leveraging Google BigLake to develop a global
blueprint that decreases green premiums andaccelerates the renewable energy transition.
>> Learn more on r-evolution.com

18

01 Sustainable business

02 Solutions for the future
STRATEGY

03 People and culture
STRATEGY

04 Enabling change with consciousness
STRATEGY

05 Governance

06 The numbers

CASE STUDY

Reuse of wastewater saves
precious resource
Maintaining and safeguarding water is ofutmost importance in many areas of theworld. In the United Arab Emirates, water
is a scarcity. The UAE’s northernmost
emirate, Ras Al Khaimah, produces 12
million cubic metres of wastewater
annually and has set a bold ambition toreuse 100% of its wastewater by 2023.
Water management, collection andtreatment is a complex and intensive
task that draws on a vast amount ofheavy infrastructure and assets — all ofwhich need to be efficiently maintained
to ensure optimal performance. One key
challenge for Ras Al Khaimah’s public
utility RAK Wastewater Agency was tomanage and maintain its assets, ensuringhigh-quality maintenance across its
operations. Furthermore, the operations
and maintenance (O&M) department foundit difficult to maintain clear oversight ofexactly where it should direct maintenanceresources. This led to a reactive rather

than proactive approach, where efficientutilisation of labour hours and accuracy ofoperational data was a challenge.
After assessing several enterprise asset
management (EAM) solutions fromdifferent vendors, the O&M department
decided to implement HxGN EAM to fully
automate its asset maintenance, including
daily schedules that could tell the O&M
which assets they should proactively
check, repair, maintain or replace.
By implementing HxGN EAM, the emirate
made significant strides in its ability toefficiently monitor and maintain its assets,with the results including:• 55-60% decrease in emergency workorders• 17% decrease in amount of corrective
maintenance and related work orders• 3% reduction in operating costs>> Read more about this project here.
19

01 Sustainable business

02 Solutions for the future
STRATEGY

03 People and culture
STRATEGY

04 Enabling change with consciousness
STRATEGY

05 Governance

06 The numbers

CASE STUDY

Measurement to better gather
the power of the sun
Energy is a key factor for sustainable andeconomic development, as the world istransitioning from fossil-based systems torenewable energy sources. One challenge
for the growth of solar energy is thetotal investment costs of solar panels, achallenge Hexagon’s solutions are part ofsolving. Today, Hexagon scanners are usedin large-scale solar park projects both inproduction and assembly of solar panels.
In 2022, Hexagon was involved in a project
together with a Spanish infrastructure
and renewable energy giant aiming to
optimise the design processes, bothin terms of the cost and the efficiencyof the process, including assembly. The

Hexagon ATS600 tracker was used all theway from quality inspections at the factory
floor by controlling components during
manufacturing to the tooling levelling
process to finalise the assembly of thepanel. The direct scanning functionality
enabled measurements to be performed
accurately, without contact and with ahigh measurement capacity. Improving
the remote measurement brought
down the total cost associated with theimplementation of new solar parks –enabling further growth.
>> Read more about this project here.

20

01 Sustainable business

02 Solutions for the future
STRATEGY

03 People and culture
STRATEGY

04 Enabling change with consciousness
STRATEGY

05 Governance

06 The numbers

CASE STUDY

A digital reality model of
Stuttgart for better living
The City of Stuttgart, Germany, haslaunched a Digital Twin project to solve
urban sustainability challenges. To get
the baseline in place, Hexagon waschosen to deliver a digital twin platformof the city, built on an SaaS solution thatwill visualise and analyse data from IoT
sensors installed throughout the city. The
insights gained from the data will be used
to promote sustainability and enhancequality of life for the 600,000 residentsof Stuttgart.
The solution will provide a common
operating picture for monitoring sensor
values, such as water quality, flood levels
and parking space occupancy, enabling

the city to derive insights for optimising
operations and making informed decisions
for the future. The digital twin platform
is based on Hexagon’s unified geospatial
enterprise platform M.App Enterprise, andHexagon’s proprietary Xalt data integration
framework, which together captures andprocesses all sensor and operational dataand extracts useful data from it. Projects
like this can be used as best-practicemodels for how cities can solve today’s
most pressing urban challenges, such assustainability, safety and mobility, throughthe use of real-time data analysis.
>> Read more about this project here.

21

01 Sustainable business

02 Solutions for the future
STRATEGY

03 People and culture
STRATEGY

04 Enabling change with consciousness
STRATEGY

05 Governance

06 The numbers

CASE STUDY

Automation in construction
protects people and resources
Autonomous technologies areimportant in construction because
they can improve efficiency, safety
and reliability. By employing advanced
sensors, machine learning and artificial
intelligence to perform tasks without
human intervention, autonomous
technologies reduce the risk of humanerror and improve overall efficiency.

One application where the BLK ARC has
proven a great enabler of safety andsustainability is within construction. Oneof the larger construction companies
in the US is using BLK ARC to keep
workers safe by autonomously scanning
construction activities such as demolitionareas and providing insights in potential
dangerous situations.

Hexagon’s Leica BLK ARC is designed to
improve the autonomous navigation ofrobots and other carrier platforms anddelivers fully autonomous mobile laser
scanning. Combining its speed, accuracy
and versatility with robotics, the BLK
ARC addresses the growing demand forautonomous solutions that can safely
and repeatedly capture accurate 3D
point clouds and panoramic images ofchanging environments with minimaluser intervention.

The BLK2GO laser scanner is also
used to scan buildings before they will
be demolished in order to estimate
materials available, which creates anaccurate dataset of existing materials andstructures to improve material circularity
and save on costs.
The results are fewer injuries andincreased amounts of building materials
recycled, which in turn reduces the needto extract natural resources to make newbuildings, preserving natural ecosystems
and biodiversity.
>> Read more about this project here.

22

01 Sustainable business

02 Solutions for the future
STRATEGY

03 People and culture
STRATEGY

04 Enabling change with consciousness
STRATEGY

05 Governance

06 The numbers

CASE STUDYManaging material movement forsignificantly reduced emissions
Nearly 80% of the greenhouse gases
from the mining industry stem from loadand haul operations. Fleet management
systems are central to load and haul,
and Hexagon’s software MineOperate isplaying a central role in managing material
movement more efficiently to minimiseemissions. MineOperate takes a holistic
approach to efficiency initiatives and helps
mines to better utilise their equipment,
improve their workflows, reduce costs andimprove productivity.
In practice, the MineOperate portfolio
provides a high-precision guidance
solution for dozers, drills and loading

equipment. It enables loading equipment
to improve bench elevations, reduce
dilution and decrease rework. For dozers,
the solution provides operators witheasy-to-visualise design plans, minimisingcosts by eliminating the need for grade
staking and survey crews. And for drills,
the solution enables drilling to the rightposition and elevation the first time. The
sustainability results that help decrease
emissions include:• 13% productivity increase• 60% lower refueling trips• 99% correctly routed loads>> Read more about this project here.

23

01 Sustainable business

02 Solutions for the future
STRATEGY

03 People and culture
STRATEGY

04 Enabling change with consciousness
STRATEGY

05 Governance

06 The numbers

Success stories from customers
The key sustainability benefits that Hexagon delivers
are best seen through the eyes of its customers. Byutilising Hexagon’s technologies, customers achieve
positive results that benefit both their financial
outcome and the world, primarily by reducing
negative environmental impact. The following fiveexamples highlight the Hexagon’s positive impact on
customer operations and processes.
Reclaiming and repurposing construction anddemolition waste with technology - Accsys
Hexagon’s customer, Accsys Engineering Group
specialises in building information modelling (BIM),
project management, 3D scanning, 3D surveying
and special-works projects, and their work is criticalin the reduction of construction and demolition
waste (CDW), an environmental hardship that is
rapidly increasing in urban areas.
As construction spending increases due to a growing
population and rapid urbanisation, Accsys sought
solutions to combat the environmental burden of
construction and demolition waste. Using
Hexagon’s best-in-class reality-capture technology,
Accsys led a large-scale survey project to salvage
building material from an old building to be
repurposed in future projects.

In addition, Accsys leveraged Hexagon’s technologies
on many projects, including a job to clean and reusedecommissioned power plants. A cartographic survey
covering an area of more than 20,000 square metres
was conducted to determine the quantity ofrecyclable materials, thereby minimising therequirement for new building materials made fromnatural resources. This represented a crucial chance
to conserve natural ecosystems and biodiversity. At
the same time, they created a geotagged collectionof samples for environmental examination.
Accsys used Hexagon reality-capture technology
to create point-cloud data for 3D digital twins withhigh accuracy and detail. The information was thenprocessed, cleansed and exported in two point-cloudformats for modelling and client communication. The
final deliverable was a multi-format BIM.
The fully accurate digital survey of the soon-tobe-demolished site allowed the project to beworked on downstream, using only data to improvematerial circularity and reduce costs.

24

01 Sustainable business

02 Solutions for the future
STRATEGY

Empowering farmers to adopt greener businesspractices - Eau de Paris
Eau de Paris, a French utility company, launcheda 10-year aid project in conjunction with the Seine
Normandy Water Agency to enhance resource
protection in the catchment areas of Paris. The
project supports nearly 200 farms and 25,000
hectares of land (nearly 62,000 acres) with 74 million
euros in grants. Farmers who were selected to receive
grants are expected to reach certain sustainability
targets and will be supported for up to seven years —enough time to set the stage for lasting change.
Eau de Paris’ sustainable farming project requires
large-scale data management and visualisation,
workflow management solutions and scalable
analytics to support the entire lifecycle of the
project. Hexagon’s technologies allow farmers, Eaude Paris and the Seine Normandy Water Agency
to collaborate throughout the lifecycle of the
project with maps, dashboards, smart forms anddigital workflows. Integrating farmers’ requests
from the field with validation and monitoring
capabilities empowers Eau de Paris to guidefarmers through the entire process, from grant
request to transition completion. This ensures that
farmers maintain compliance, providing the watercompany with the ability to control and manage
the grants, and also helps them meet required
benchmarks throughout the process.

03 People and culture
STRATEGY

04 Enabling change with consciousness
STRATEGY

New farming practices have been adopted thanks to
the launch of this project. For example, limiting theuse of fertilisers, pesticides, growth activator andother non-natural products, along with promoting
the development of organic farming and grassland,
has resulted in cleaner drinking water and preserved
biodiversity in metropolitan Paris.
Putting data to work to better understand wildlife
characteristics and preserve species - Kindai
University
Kindai University in Japan has a wealth of researchfacilities for focusing on the preservation of
biodiversity, especially in oceans, as the pressure
on natural resources increases. Understanding
biological characteristics of species helps topreserve and meet the demand in a different way,and Kindai is using Hexagon’s technologies to better
understand wildlife characteristics in an effort tofacilitate preservation efforts.
Bluefin tuna, highly valued by anglers and chefs,
are still little understood in terms of their natural
habitats as they swim freely in the ocean. Conducting
experiments in confined laboratory spaces made it
impossible to fully understand their movement. Live,in-ocean tests under changing fluid velocities withthe attachment of sensors would be equally if not
more challenging, and so a computational modelling
approach was chosen.

05 Governance

06 The numbers

The goal of this project was to accurately develop
computer simulations to better understand thebiological characteristics of these fish. 3D models
of tuna fish were created from comparatively sized
frozen tuna, and Hexagon’s computational fluid
dynamics (CFD) software was employed to simulate
the complex geometries of the fish, enabling theaccurate representation of an animal in motion
and to generate new insights into the swimming
characteristics of the bluefin tuna.
The use of Hexagon’s technology at Kindai University
provided valuable insights and is helping to
optimise the preservation of species, ensuring thatconservation efforts are as effective, efficient andsustainable as possible.
Accelerating the installation of floating solar parks- Knoopbv
A leader in inland dredging, nature restoration
and anchoring projects in the Netherlands, Knoopbv
needed a partner to help them find the rightlocations to anchor floating solar panels efficiently
and cost effectively. Although solar energy is
becoming more commonplace, installations incoastal areas can be difficult.
Knoopbv leveraged Hexagon’s technology for the
installation of 72,000 solar panels covering 20
hectares. This work has presented new opportunities
to build solar panels in coastal areas, increasing25

01 Sustainable business

02 Solutions for the future
STRATEGY

the opportunity to use renewables — an important
technique for climate change adaptation.
If developed and applied properly, renewables canprovide several times more energy than the world
currently consumes. At the same time, solar energy
can also reduce emissions that cause air pollution
and slow down global warming caused by carbon
dioxide combustion.
Fighting herbicide runoff in the world’s most famous
coral reef - SwarmFarm Robotics
Since 2012, SwarmFarm Robotics has led the way
in precision agriculture through its development
and usage of SwarmBots — completely autonomous
robots that use positioning technology to moreaccurately farm land that was previously inaccessible.
Through a partnership with Hexagon, the SwarmBots
utilise state-of-the art, integrated GNSS andpositioning technology that allows the bots to work
effectively in a compact and affordable fashion,
maximising yield and efficiency for customers while
also reducing the environmental impact of farming.
As a result, SwarmBots have farmed over 1,000,000
acres and eliminated 431,000 litres of herbicides
from the catchment area for Australia’s Great Barrier
Reef alone — protecting this vital yet threatened
aquatic ecosystem.

03 People and culture
STRATEGY

04 Enabling change with consciousness
STRATEGY

05 Governance

06 The numbers

Through this advancement in affordability and usabilityof autonomous farming equipment, SwarmFarm has
been successful in delivering commercial, autonomous
farming machinery into broad scale adoption inagriculture. Farmers have been anticipating thistechnology for many years and the results are
remarkable; in just over three years, there’s been a
95% reduction in herbicides sprayed in farm fields
draining into the Great Barrier Reef.
This is just the beginning for the SwarmFarm team,which plans to develop future generations of
SwarmBots across a wide variety of crops andregions. Their goal is to bring access toenvironmentally sustainable agriculture technology
to everyone.
The application of technology has been
demonstrated to enhance operational efficiencies,
improve decision-making, decrease waste, lower abusiness’s carbon footprint and contribute to a moresustainable future in numerous industries. Hexagon’s
technologies are addressing issues globally andfostering innovative solutions that have a positive
impact on the world.

26

01 Sustainable business

02 Solutions for the future
STRATEGY

03

03 People and culture
STRATEGY

04 Enabling change with consciousness
STRATEGY

05 Governance

06 The numbers

People andcultureSTRATEGY

A diverse and inclusive workplace is critical to innovation and long-term, sustainablegrowth. Hexagon achieves this with a comprehensive approach focused on competencedevelopment, diversity & inclusion, employee engagement and health & safety.

27

01 Sustainable business

02 Solutions for the future
STRATEGY

03 People and culture
STRATEGY

04 Enabling change with consciousness
STRATEGY

05 Governance

06 The numbers

People and culture
The core of Hexagon’s business is to create the solutions of tomorrow that enable our customers to make a transition towards
sustainability. Attracting, developing and retaining the best employees in the industry is key to achieving this mission. The
company employs more than 24,000 people globally, many of whom are highly skilled engineers and software developers. Hexagon
firmly believes that a diverse and inclusive workplace is not only advantageous, but also critical to innovation and creativity.
A strong and inclusive culture increases innovation
Hexagon is committed to being a diverse workplacethat mirrors the international nature of the business– with employees, customers and suppliers working
across the world in more than 50 countries. With anapproach focused on competence development,
diversity and inclusion, employee engagement, andhealth and safety, Hexagon is able to increase its
innovativeness and remain competitive with its peers,
regardless of where it operates.
This can only be achieved by building a strong
and inclusive culture enabling great prospects for
growth and competence development. As a globalorganisation, Hexagon celebrates the differencesof its employees, and strives to build a working
environment where different values and perspectives
are actively harnessed in order to create the bestsolutions for an equally diverse customer base. In
promoting diversity, Hexagon also increases its accessto a greater range of talent.
The Hexagon Code of Business Conduct and Ethics
helps govern issues such as fair employment, diversity,
discrimination, harassment, health and safety. All
businesses in the company are obliged to adopt andimplement the Code to ensure a uniform approachto these issues across Hexagon. All employees andcontractors undergo mandatory e-learning in the Codeof Business Conduct and Ethics to ensure it is adopted
broadly throughout the organisation, which is repeatedregularly to ensure adherence.

A company-wide employee survey was launchedin 2022, with one section specifically focusing on
inclusion topics, with in 14 different areas in total.
Overall, Hexagon scored better than its industry
norm and high-tech company peers, with an average
diversity and inclusion index score of 76%, compared
to 71% for the industry peers. The survey results
were also consistent across genders. Key areas for
improvement were in advancements opportunities anddeveloping people from different backgrounds, which
will be target areas when focusing on HR initiatives inthe years to come.
Activities to support inclusion and prevent
discrimination
In 2022, all employees underwent a mandatory course
in diversity, equity and inclusion, focusing on how tocreate an inclusive workplace, unconscious bias, micro
inequities and how to respond to workplace challenges.
A total of 19,562 employees conducted the course.
Hexagon strives to develop the competences andskills of its employees to ensure opportunities for
professional growth. The attraction, retention anddevelopment of employees is central for Hexagon’scompetitiveness and crucial for the success of thebusiness. In 2022, the overall retention rate for
employees was 89%.
Hexagon seeks to actively recruit, continually develop
and retain talented people from diverse backgrounds
and origins. All current and future employees aretreated with equal respect and receive an equal
opportunity to contribute to the company’s successbased on their individual skills sets and interests.
Hexagon also strives to be a gender-diverse workplaceacross all levels of management. At year-end 2022 theBoard of Directors at Hexagon consists of four womenand six men while executive management consists of
one woman and 12 men. Gender distribution in leading
positions, including divisional management and theirdirect reports, was 23% women and 77% men in 2022.
The goal is to reach 30% female managers by 2025,
which primarily will be attained through activities that
support inclusion such as trainings and mentorshipprogrammes aimed at making Hexagon a more
attractive employer for women. No quota initiatives will
be implemented.
Any kind of discrimination is completely unacceptable
at Hexagon, no matter if it is exhibited internally or in
relation to customer and supplier relations. Prohibiting
discrimination is part of the Hexagon Code of BusinessConduct and Ethics, and the Unfair Discrimination andHarassment Policy implemented in 2022.
To ensure that discriminatory behaviour does notexist within the organisation, employees haveseveral channels to report any behaviour that could
be considered discriminatory. The first avenue ofreporting cases of discrimination is through directaccess to the HR leader within their division. If theissue cannot be handled at the divisional level, theThe attraction, retention and developmentof employees iscentral for Hexagon’scompetitiveness.”

342

89%

Number of lost days due
to work-related injuries

Retention rate

Management Total worksplit by gender force splitr

Board ofDirectors split■ Male, 77%■ Male, 76%■ Male, 60%■ Female, 23% ■ Female, 24% ■ Female, 40%

19,562
Number of employees
having ­conducted DEI
training

73%

Employeeengagement
level

28

01 Sustainable business

Human Resources EVP is approached. The Compliance
Officer also offers direct communication opportunities
that are managed by the Corporate Legal Group, throughthe anonymous third-party whistleblowing system.
Employees who may be subjected to unfair discrimination
and/or harassment have the right to report it to Hexagon,
and there are processes in place to ensure the employee
may do so without fear of victimisation and intimidation.
Preventing discrimination and harassment is everyone’s
responsibility and all employees have an obligation toreport such instances harassment to Hexagon. Hexagon
understands that reporting unfair discrimination andharassment can be extremely sensitive and, as a result,
Hexagon will endeavour to keep such reports confidential
to the extent reasonably possible.
Hexagon managers and supervisors have theresponsibility and are obliged to report a harassment
claim when they know, are notified or have reason
to believe that an employee has been subjected toharassment by another employee. Hexagon will either
conduct a prompt, fair, and impartial investigationof all reports internally or assign them to an external
investigator, if appropriate.
On a local basis, each employee has an assigned HR
professional who will act as the employee’s advocate insituations where interventions are necessary.
Occupational health and safety
The safety of personnel in the workplace is a top priorityfor Hexagon. Ensuring that employees work in a safeand healthy environment is the key to any successful
business. Hexagon aims to provide a workplace thatis free of incidents and promotes a culture of hazard
identification and awareness, incident reporting and selfaccountability. Employees are provided with appropriate
training and safety equipment to perform their jobs
securely. Each employee is personally responsible for

02 Solutions for the future
STRATEGY

03 People and culture
STRATEGY

04 Enabling change with consciousness
STRATEGY

05 Governance

06 The numbers

working in a safe manner, following all health and safety
policies and procedures, participating in safety training
and identifying and reporting any health and safetyissues and hazards to management or the relevantinternal stakeholders.
As the nature of Hexagon’s business mainly focuseson software development and assembly of high-techcomponents, the risk for direct injuries is consideredvery low. The guiding principles for workplace safety
are laid out in the Hexagon Code of Business Conduct
and Ethics. The company strives to minimise the risks ofincidents and work-related illnesses among its workers
and employees by reducing unnecessary stress andsupporting initiatives for work-life balance. During the
COVID-19 pandemic, Hexagon implemented strong
measures at local level to ensure its employees safety.
Where appropriate, Hexagon supports a flexible workplace and the opportunity to work from home. Hexagon
is responsible for maintaining a safe work environment
by implementing all applicable health and safety rules
and practices within each Hexagon entity. All divisions
and local entities have processes and systems in place
to ensure compliance with all applicable rules andregulations. Two of the sites achieved the ISO45001
accreditation in 2022.
Every division also has separate policies related to
specific work tasks that are at risk, reflecting the specificactivities conducted at each division. Each Hexagon
location has a management team member that is
assigned to ensure that all mandated health and safety
guidelines are followed, and each location is requested
to map and mitigate potential risk situations for its
employees. Relevant indicators of work-related injuries
and illnesses are monitored at a divisional and/or local
level. In 2022, the total number of lost days due to injuries
were 342 across the company.
29

01 Sustainable business

02 Solutions for the future
STRATEGY

04

03 People and culture
STRATEGY

04 Enabling change with consciousness
STRATEGY

05 Governance

06 The numbers

Enablingchange withconsciousness
Hexagon has implemented clear sustainability processes built on consciousness
within our operations, supply chain and social engagements to enable positive change
wherever we operate.

30

01 Sustainable business

02 Solutions for the future
STRATEGY

03 People and culture
STRATEGY

04 Enabling change with consciousness
STRATEGY

05 Governance

06 The numbers

Sustainability impact throughout the value chain
Hexagon addresses environmental and human rights issues throughout its entire value chain. As the production of Hexagon is formed of software development andassemblying of components, its greatest sustainability impact lays within its supply chain and the customer use of its products.

Sourcing

Transportation

Production

Customer use

Recycling

Hexagon’s sourcing consists predominantly oftechnology components and server capacity,and thus no resources or raw material ispurchased. Hexagon is however exposed torisks related to human rights via its supply
chain, and also need to ensure the metals in
the components stem from ethical sources.

Hexagon has a worldwide presence withcustomers in all regions. Transportationof products from production facilities tocustomers generate indirect emissions
through suppliers of transporting services.
Hexagon’s consultancy and support services
also generate travel emissions.

Hexagon has no energy or resource intensive
production facilities. The production is mainly
assembly of components or developmentof software solutions, limiting the stress onenvironment and workers.

The use of Hexagon products increases
efficiency, lowers waste, and supports safety,
with huge positive impact. This is where thekey positive sustainable impact in Hexagon’svalue chain takes place.

When Hexagon’s products have reached theend of their life-cycle they contain metals andplastics components that should be recycled
to avoid negative climate stress.

How we act

How we act

How we act

How we act

How we act• Rigid processes for onboarding of new
suppliers, covering human rights andenvironmental aspects.

• Establishing productions facilities near
suppliers and customers.

• Environmental policy and ISO 14001
certification programme for facilities.

• Innovation and R&D focused on solving
sustainability challenges of customers.

• Sustainability targets for scope 3
emissions.

• Program to increase share of renewables.

• Exploring new opportunities withingreentech through new business venture.

• An after-market program where customers
can return products to Hexagon forrecycling or recalibration.

• Conflict minerals policy for sourcing andsuppliers.
• Strong supplier audit program.

Negative ESG impact• Company car framework to reduce
emissions.

Moderately negative ESG impact• Sustainability targets for Scope 1 and 2
emissions.

Moderately negative ESG impact

Positive ESG impact• Repurchase program of used equipment forreselling to other markets or industries.

Moderately negative ESG impact

31

01 Sustainable business

02 Solutions for the future
STRATEGY

03 People and culture
STRATEGY

04 Enabling change with consciousness
STRATEGY

05 Governance

06 The numbers

Environmentally responsible
operations
Hexagon is an enabler of a sustainable future, providing solutions that address the main
environmental and social challenges that companies and nations face today. In order towork towards the UN Sustainable Development Goals and the 2030 Agenda for Sustainable
Development, Hexagon takes accountability for the environmental challenges in its internal
operations as well as in all steps of the value chain.
In 2022, Hexagon joined the Business Ambition for 1.5°C
and committed to setting science-based targets for its
emissions, an important step in increasing transparency
and driving change that will benefit the entire planet. By
upholding high standards of environmental sustainability
processes, Hexagon enables activities that aims to
reduce its environmental footprint, to better meetcustomer requests, attract and retain talent, generatesavings, mitigate environmental risks and fuel innovation.
Hexagon is a signatory of the United Nations Global
Compact (UNGC) which means that the company supports
and actively promote its ten principles on the environment,labor practices, human rights and anti-corruption in ouroperations and in relation to external stakeholders. This
also means that Hexagon seeks to conduct business ina responsible and ethical manner and support the UN
Sustainable Development Goals (SDGs).

-5.3%

23,000fewer combustion
vehicles in car fleet

Renewable energy
produced

MWh

Reducing the environmental impact
Hexagon’s environmental commitment is defined in
the Environmental Policy and is guided by the Hexagon
Code of Business Conduct and Ethics. As defined in its
Environmental Policy, Hexagon is committed to:• reducing greenhouse gas emissions in its operationsand value chain• increasing energy efficiency at its production
facilities• reducing waste and implementing processes forsustainable resource management• reducing the stress of water and air quality from own
operations and supply chain• Integrating sustainability considerations into productdevelopment, design and production processes• Stop and reverse biodiversity loss working withpartners to protect different natural ecosystems
The carbon targets will be achieved by increasing energy
efficiency in Hexagon’s facilities, reducing waste inproduction and emissions from business travel as wellas in its company car fleet. It will be accomplishedthrough increasing Hexagon’s focus on sustainability inits product design process, investing in renewable energy
and carbon capture technology, to mention a few.
32

01 Sustainable business

02 Solutions for the future
STRATEGY

03 People and culture
STRATEGY

04 Enabling change with consciousness
STRATEGY

In terms of environmental management, leadership ateach division at Hexagon is responsible for establishingappropriate procedures and organisational structures
to comply with the policy and all applicable laws andregulations, ensuring that efforts and activities that are vitalto the division and its facilities are effectively prioritised
and managed in order to reduce carbon footprint.
Hexagon has obtained ISO14001 certifications for the
majority of its larger production sites. On these as
well as on other sites, environmental management ismanaged systematically and with a focus on continuous
improvement. Hexagon plans to continue implementing
ISO14001 or equivalent management systems at its larger
facilities as appropriate over the coming years.
Environmental management in Hexagon’s softwaredevelopment division will focus on methods of reducing
resource and energy consumption, such as using a single
source of data to minimise the effects of data mining andreduce energy usage of servers.
Design process
Hexagon’s Innovation Process (HIP) is a robust activity
that drives the efficiency and effectiveness of products(hardware, software or services) through continuous
development and improvement. The process includes
defined milestones and corresponding deliverables thatthe project team must present to a steering committee
in order to obtain approval to continue. An impact
assessment of each and every task is conducted asa part of the design phase. In projects that contain

05 Governance

06 The numbers

high risks or unknown factors, a pre-project might
be executed to reduce risks or in order to get more
information for the main project.
As part of the Hexagon Innovation Process, each productgroup within Geosystems receives a recycling passport,
which reviews materials used while it confirms thateach product complies with the EU Directives on Waste
Electrical and Electronic equipment (WEEE 2012/19/
EU) and Restriction of the use of certain hazardous
substances (2011/65/EU). The recycling passport
gives information on the product groups’ reusability,
recyclability, treatment, and waste disposal.
In 2022, Hexagon continued the LCA (Life-Cycle
Assessment) from cradle to grave of specific products.
The LCA’s take into account the full environmental
footprint of the product, and the program will be
expanded to cover more solutions in the coming years.

35%

27

Share of renewableenergy, Scope 2

ISO14001 certified
production sites

33

01 Sustainable business

02 Solutions for the future
STRATEGY

03 People and culture
STRATEGY

04 Enabling change with consciousness
STRATEGY

05 Governance

06 The numbers

Responsible supply chain
management
Ensuring a responsible supply chain is important to Hexagon as it not only prevents
disruptions in the supply chain and potential reputational risks, it is also critical for the
wellbeing of people, societies and our planet for generations to come.
Hexagon’s compliance policies regarding supply chain
management are set out in the Code and in various
Compliance Programme manuals and procedures.
Hexagon selects suppliers based on an assessment of
the overall competitiveness of the offering and if they
live up to the goals and values expressed in the United
Nations Global Compact’s ten principles in the areasof human rights, labour rights, environmental impact
and anti-corruption. Hexagon strives to ensure that its
suppliers follow the principles set out in the Code.
Supplier Code of Conduct
Hexagon’s Supplier Code of Conduct was updated toreflect the highest business standard in 2022, to include
higher requirements on processes for counterfeit
materials and working hours. Compliance with the
Supplier Code of Conduct, or other agreed equivalent
standard, is a mandatory qualifying condition for
Hexagon to enter a business relationship with a supplier.
In addition, third-party suppliers and subcontractors in
Hexagon’s global supply chain are contractually required
to meet these obligations.
Supplier risk screening
Processes for supplier screenings depend on thenature of the items being procured. The Hexagon
policies related to supply chain management include
requirements for (i) screening Hexagon suppliers against
applicable sanctions list; (ii) conducting additional due
diligence on suppliers that may be developing Hexagon
business; (iii) including appropriate anticorruption andother compliance provisions in supplier agreements;and (iv) prohibiting acceptance of items of value orother benefits while knowing or suspecting that it isoffered or provided with an expectation that a businessadvantage will be provided by Hexagon. Additionally,
Hexagon will not purchase from suppliers that procure
products originating from sources subject to applicable
trade sanctions. Hexagon uses the framework and tools
provided by the Responsible Business Alliance, enabling
the company to use leading standards and tools for
supplier risk screening.
Supplier audits
Hexagon performs audits of both new and existing
suppliers based on both desktop research, selfassessments and onsite visits, since 2021 leveraged
through internal resources, the Responsible Business
Alliance and other third-party auditors. Audit schemes
and processes differ from division to division depending
on risk levels and operational contexts. Hexagon divisions
that manufacture hardware have adopted a systematic
evaluation process for all new suppliers that contains
several steps of scrutiny to ensure compliance with
Hexagon’s policies.

56
Key suppliers inrisk countries

11
Number of audited key suppliersin risk countries 2022

In 2022, Hexagon performed approximately 80 auditsof new and existing suppliers. The audits are targeting
suppliers in risk countries, as Hexagon has a goal of
conducting sustainability audits on all suppliers in suchcountries by 2023. Hexagon expect to reach the target
by 2023.
34

01 Sustainable business

When existing suppliers fail to comply with Hexagon’scompliance requirements, Hexagon engages withthe supplier and conducts an impact assessment tounderstand the root cause. Appropriate follow-up actions
consist of taking suitable actions to ensure that the issue
will not be repeated. In some cases, when infringements
are deemed significant and intentional, Hexagon willterminate the supplier contract and will seek a sourcing
alternative. Key suppliers of manufacturing entities
are evaluated through internal formal visits, reviewsand evaluations to ensure that they strictly follow
the Hexagon Supplier Code of Conduct. Third party
assessment is used in cases where an issue cannot be
verified directly with the supplier.
Conflict minerals compliance
A small part of Hexagon’s activities is affected by theregulation of conflict minerals including the Dodd Frank
Act. Hexagon does not source conflict minerals directly,
but some divisions are indirectly affected by regulations
through sourcing products and materials from suppliers
and sub-suppliers. In such cases, Hexagon works in close
collaboration with the suppliers and uses a rigorous
process to collect all necessary data as proof of strict

02 Solutions for the future
STRATEGY

03 People and culture
STRATEGY

compliance. Affected business-to-business activities
include the provision of OEM (Original Equipment
Manufacturer) products purchased by machine
manufacturers in the United States. Hexagon maintains
a Conflict Minerals Policy, applicable to the Group,
outlining the commitment and actions taken to avoid
conflict minerals in its operations and supply chain.
Hexagon’s divisions implement processes to ensurecompliance with this policy as is applicable to eachdivision’s operations. For example, Hexagon’s Autonomy& Positioning division requests current and new suppliers
to complete a Conflict Mineral Report Template(CMRT) for all parts supplied. The CMRT is provided
by Responsible Minerals Initiative (RMI) and has been
adopted by the industry. The CMRT file is constantly
being revised by RMI with updated Smelter information
and whenever a supplier response is received the fileautomatically identifies suspected Smelters. Hexagon,
to best of its knowledge, represents and certifies thatit does not receive any materials or products containing
cassiterite (tin), coltan (tantalum), wolframite (tungsten)or gold (known as “3TG minerals”) sourced from the
Democratic Republic of Congo or adjoining countries.

04 Enabling change with consciousness
STRATEGY

05 Governance

06 The numbers

In 2022, Hexagon
performed
approximately 80 audits of
new and existing suppliers.”

35

01 Sustainable business

02 Solutions for the future
STRATEGY

03 People and culture
STRATEGY

04 Enabling change with consciousness
STRATEGY

05 Governance

06 The numbers

Social engagements
As a global company, Hexagon has the ability and responsibility to give back to society.
Hexagon supports and actively engages with the communities where it operates throughphilanthropic activities and charitable organisations. Local initiatives range from donating
technologies to non-profits, training and supporting environmental research, partneringwith universities to develop future talent, and sponsorship of community events.
With employees all over the world, Hexagon has been
welcomed by many communities that continuously
provide their support, talent, and resources to thesuccess of Hexagon’s business. This makes Hexagon a
global company with a local heart, and it is important togive back to the community. Local initiatives range fromdonating technologies to non-profits and educational
institutes to partnering with universities to develop
future talent. As part of Hexagon’s sustinability
strategy, the company has committed to implement a
CSR programme focused on environment, education,
innovation and diversity.
One initiative to support the climate is Hexagon’s
partnership with global rainforest conservation charity
Cool Earth, offering vital funding and support across its
projects. The eco-projects partnership brings together
Hexagon measurement and digital reality technologies
with the expertise of Cool Earth for rainforest
conservation. The partnership aims to raise awarenessabout the importance of taking climate action by funding
projects that improve understanding and address
the needs of people that live in and protect carbon
sink environments. As part of the initiative, Hexagon
will provide vital funding to back people-powered
conservation across three largest rainforest biomes: theAmazon, Congo and New Guinea forests.

Hexagon is also an avid supporter of quality education.
An example of its educational program is Hexagon’s
partnership with the National Institute of Technology
to set up student labs at some of the top technology
institutes across the country. The labs are available tostudents across all departments and offer training andskill development on topics such as hardware and software
licensing. To ensure an increased in-house expertise,advanced training for processors is also offered.
Another initiative to provide students of the future withcompetitive skills is artificial intelligence community
centre named HexArt that is established in the city
Hyderabad by the Hexagon Capability Center India (HCCI).
The institute offers courses free of charge to school
students and engineering graduates, as a step towards
democratising Artificial Intelligence knowledge in India.
To support humanitarian efforts in Ukraine and to shelter
refugees, Hexagon donated 500,000 EUR in 2022 divided
evenly between Doctors Without Borders and UNHCR.
Hexagon is commited to expanding its CSR programmewith a global focus on environment, education,
innovation and diversity across the entire company,
supporting its commitment of engaging in societal
development issues where Hexagon can make thegreatest impact.

36

01 Sustainable business

02 Solutions for the future
STRATEGY

05

03 People and culture
STRATEGY

04 Enabling change with consciousness
STRATEGY

05 Governance

06 The numbers

GovernanceHexagon’s sustainability governance report presents the sustainability management
organisation, due diligence process, compliance mechanisms and cyber security
structures in place to ensure long-term sustainable growth.

37

01 Sustainable business

02 Solutions for the future
STRATEGY

03 People and culture
STRATEGY

04 Enabling change with consciousness
STRATEGY

05 Governance

06 The numbers

Sustainability governanceHexagon’s Chief Strategy Officer is a member of Group Management reporting
directly to CEO and President, thus ensuring group-wide commitment tosustainability issues.
Sustainability management
The sustainability agenda at Hexagon is centrally
managed by the Chief Strategy Officer via thesustainability and strategy programme, which defines
the framework, goals, commitments and deliverables forthe sustainability organisations within each of Hexagon’s
division. Expert groups within operations, procurement,
HR, compliance and marketing are formed with members
from each division who undertake sustainability
initiatives depending on their operational context andgoals. The progress is reported on a quarterly basis
to the President and CEO and the Board of Directors’,
thereby ensuring that sustainability initiatives areanchored throughout the entire organisation.
Ensuring sustainability as Hexagon grows
Acquisitions play a vital role in Hexagon’s growthstrategy. In this business model, a focus onsustainability is central to the company’s overallsustainability management as Hexagon acquires andintegrates new companies.
For Hexagon, it is always a make or buy decision whenevaluating the R&D roadmap and potential acquisition
candidates that support Hexagon’s growth strategy.
In addition to filling gaps in the portfolio, Hexagon’s
acquisition strategy is focused on extracting synergies
across its different businesses and further increasing
the group’s exposure to software and recurring revenues.
Acquisition candidates are regularly monitored andevaluated on market position, customer reputation as
well as growth and profitability potential.

Sustainability in the due diligence process
Hexagon considers many sustainability factors in an
acquisition process as it enables the company tomake better investment decisions, thereby unlocking
the potential value of sustainability and reducing theharm resulting from any possible limitations. It also
ensures a valuable foundation after the transaction
has been completed.
In Hexagon’s standard due diligence process, several
sustainability elements are considered. These include
a detailed review of the internal controls of the target
company, quality business practices, human rights,
environmental and employee matters, as well ascompliance with ISO (International Organization forStandardization) standards, LEED (Leadership in Energy
and Environmental Design) guidelines, anti-corruption
regulations (FCPA, Foreign Corrupt Practices Act) andexport controls. Hexagon also evaluates whether target
companies are following a robust code of conduct andwhether their own corporate sustainability programmes
are effective.

A focus on sustainability
is central to thecompany’s overallsustainability
management as Hexagon
acquires and integrates
new companies.”

The considerations and steps taken by Hexagon in adue diligence process are often project-specific. For
example, when evaluating a manufacturing company,
Hexagon evaluates whether the company takes
measures to ensure responsible production and asustainable supply chain. Overall, Hexagon seeks toobtain an understanding of the company’s philosophy,
how this has impacted operations and whether
management can address potential issues in the rightframework. This allows Hexagon to better determine the38

01 Sustainable business

02 Solutions for the future
STRATEGY

03 People and culture
STRATEGY

04 Enabling change with consciousness
STRATEGY

company’s sustainability profile and whether it would fit
well within the Group.
Hexagon also frequently uses external specialists,
including counsel trained in intellectual property,
employee benefits, anti-corruption, international
trade, antitrust, labour and employment law and realestate. Having a cross-functional team supplemented
by external experts allows Hexagon to appraise all
key features of the target company, including its
sustainability practices and suitability for integration
into Hexagon as a whole.
Integrating companies in Hexagon
After the closing of a transaction, where a company
becomes legally owned and controlled by Hexagon,
the acquired company is integrated into Hexagon’s
processes and methods. All companies in the Group are
required to adopt and implement the Hexagon Code ofBusiness Conduct and Ethics, which is based on the UN
Global Compact’s ten principles on human rights, labour,

05 Governance

06 The numbers

environment and anti-corruption. The newly acquiredcompany also implements the Hexagon Ethics andCompliance Programmes, covering topics including antitrust, anti-corruption, business ethics and export controls.
Hexagon also has an on-boarding checklist covering
employment, ethics and compliance, legal issues,
insurance, intellectual property and information
technology. The operational integration often includes
regular in-house visits to the acquired company to assist
with multiple onboarding tasks including compliancetraining and financial accounting reviews.
Employment agreements are established between thetarget company and the acquiring entity, which set out
policies regarding sick leave, equipment usage, travel
policies and recordkeeping. In all cases, employees
entering the Hexagon Group via an acquisition are
informed about Hexagon’s Code of Business Conduct
and Ethics and are expected to behave consistently
according to the Code.

39

01 Sustainable business

02 Solutions for the future
STRATEGY

03 People and culture
STRATEGY

04 Enabling change with consciousness
STRATEGY

05 Governance

06 The numbers

Compliance and business ethics
Hexagon is committed to ensuring that all of its personnel act with the highest standards of ethics and incompliance with all regulatory and legal requirements and recommended practices. In addition, Hexagon
applies these standards to its various stakeholders such as its suppliers and business partners.
Management of compliance and business ethics
Compliance and business ethics are centrally managed
by Hexagon’s Chief Compliance Officer via a Group
Compliance organisation and compliance organisations
within each of Hexagon’s divisions.
Hexagon’s Chief Compliance Officer, together with theCompliance Team, manages and supervises businessethics and compliance. The Hexagon Complianceorganization is managed by a Group Compliance Director
and Divisional / Regional Compliance Officers within eachof Hexagon’s divisions and/or regions. Additionally, aCompliance Strategic Cabinet monitors compliance legal
developments and sets policy accordingly.
The Hexagon Code of Business Conduct and Ethics (the“Code”) together with the Hexagon Supplier Code of
Conduct (the ”Supplier Code” revised in 2022) constitutethe framework of Hexagon’s Ethics & Compliance System.
The Code defines Hexagon’s values and sets forth
Hexagon’s expectations and requirements with respect
to activities performed on Hexagon’s behalf. The Codeis intended to serve as a central guide and reference
for Hexagon personnel to support day-to-day decision
making. The Code also sets out Hexagon’s compliancepolicies and establishes compliance programmes in key
areas of law applicable to Hexagon’s activities (each, a“Compliance Programme”), addressing anti-corruption
including government procurement, competition, trade
covering export and customs, data protection, andsustainability. All Hexagon personnel are required tocomply with the Code and with the specific compliancepolicies established thereunder.
Hexagon continuously reviews and improves the Codeto reflect evolving industry standards and changes tolegislation. The Code, revised in 2021, reflects Hexagon’s
responsibility as a market leader to uphold the highest
standards of ethics, integrity and sustainability andreinforces Hexagon’s commitment to act and behave
professionally and beyond legal compliance, striving
for the highest ethical standards. To this end, Hexagon
trains employees regarding its expectations, utilises
experts in multiple jurisdictions across different
disciplines and employs an in-house team of legal andcompliance professionals to ensure that Hexagon’scompliance and business ethics policies and practices
remain at the forefront of industry practices. Each
Hexagon division is responsible for creating procedures,instructions, guidelines, worksheets, templates, andother compliance tools to implement Hexagon’s Ethics &Compliance System.
Hexagon seeks to positively impact the environment
by acting sustainably and addressing environmental
challenges through its supply chain. Therefore, theSupplier Code Conduct, revised and updated in 2022,
is intended to communicate Hexagon’s minimum
requirements for the standards and business practices
of Hexagon Suppliers.
All Suppliers must comply with the Supplier Code as
well as all applicable laws, regulations, and standards inevery country in which they operate. Further, Suppliers
are expected to conduct their business in an ethical andsustainable manner and to act with integrity.
Hexagon managers are responsible for ensuring that
employees are fully aware of the Code and take thenecessary steps to promote and monitor compliancewith the Ethics & Compliance System. With the support
from the Compliance Team, each Hexagon manager
involved with Hexagon’s supply chain is responsible for
implementing the Supplier Code.
Hexagon requires its top executives to certify
compliance with Hexagon’s Ethics & Compliance Systemannually. During 2022, certifications were requested andreceived from 291 Hexagon executives.
To support the compliance responsibilities of its
business leadership, Hexagon has established a global
team of compliance professionals responsible for theadministration of the Ethics & Compliance System.

In 2022, Hexagon
issued a global
group-level
online employee
training focusing
on compliancepractices”

The Hexagon Ethics and Compliance System
Administration Manual provides an overview ofthe structure, roles, and the responsibilities foradministering our Ethics & Compliance System. The
Compliance team together with Hexagon’s management
is responsible for its implementation.
Together with the Code and the Supplier Code of
Conduct, these documents constitute the backbone of
our Ethics & Compliance System.
40

01 Sustainable business

Compliance audits and risk assessment
Hexagon’s Compliance Team performs compliance
audits to monitor the strength and effectiveness of its
Ethics & Compliance System. Such audits help Hexagon
determine how well its businesses understand andcomply with applicable compliance procedures, andwhether any modifications are required to existingprocedures to better meet the needs of the business.
The audits also help the Compliance Team to identify
potential compliance risks. In 2022, the Procedure forInternal Reporting and Investigations was released asa supplement to the compliance audit procedure. Bothprocedures allow for better identification of potential
compliance risks and handling of whistleblowing
allegations. Compliance risks can lead to violations ofapplicable laws and can negatively affect Hexagon’sbusiness and reputation. Thus, compliance risk
identification, assessment and mitigation are criticalparts of an effective Ethics & Compliance System.
The updated compliance audit procedure supports
identification, monitoring and management ofcompliance risks. In addition, different risk assessments
are periodically conducted throughout Hexagon, withanother enterprise-wide assessment being currently inthe planning phase for completion in early 2023. Theserisk assessments also cover elements of the complianceprogramme. Each Hexagon division performs risk
assessments on its partners, including assessments ofmanufacturing facilities and key suppliers. A variety of
aspects of risk are investigated and formally reported
to the Group. Follow up on recommendations arecompleted annually.

02 Solutions for the future
STRATEGY

03 People and culture
STRATEGY

Compliance training
In 2022, Hexagon issued a global group-level online
employee training focusing on compliance practices
and resources at Hexagon in addition to developing
other compliance-related courses for use by the global
compliance team. Training was also performed forthe company’s Audit Committee, this year focusedon Competition Law compliance. Moreover, Divisional
Compliance Officers, Corporate Compliance Counsel andother Hexagon compliance personnel provided training
during 2022 on various compliance topics relevant totheir respective divisions, both in person and throughonline conferences. In person training opportunities
increased during 2022 over the previous two years as aresult of the easing of some COVID-19 pandemic related
travel restrictions.
Export controls compliance
Hexagon is committed to complying with appropriate
export control policies. Hexagon’s export control
compliance efforts aim to safeguard peace and security
by preventing the unlawful transfer of items (i.e. goods,
software or technology) to prohibited destinations andend-users as well as for prohibited end-uses.
Hexagon’s export control compliance policy is
documented in the Code, in Hexagon’s Export Controls
Compliance Programme Summary and in the Export
Controls Compliance Programme Manual. These
documents address risks of export violations withrequirements in areas such as commodity classification,
sanctions compliance, restricted party and end-

04 Enabling change with consciousness
STRATEGY

05 Governanceuse screening and protecting controlled technology.
The Export Programme Summary has been updated
and Hexagon clarified its position on managementof sanctioned parties. Hexagon also tracked andimplemented processes in reaction to the various global
regulatory developments during 2022.
Hexagon has continuously monitored and updated
its internal policy regarding the Ukraine crisis. Thosechanges are reflected in the Trade Compliance
Programme Summary (https://hexagon.com/legal/
compliance). As has been previously publicly disclosed,
Hexagon took the decision to freeze its business
operations in Russia in April, 2022.
Anti-corruption compliance
Corruption negatively impacts communities and overall
global economic development and erodes the trustnecessary to build a stable business environment.
Hexagon’s anti-corruption policy is documented at theGroup level in the Code and in Hexagon’s Anti-Corruption
Compliance Programme Summary and Anti-Corruption
Compliance Programme Manual, and at the divisional
level with appropriate local procedures.

06 The numbers

94%
Employees that wastrained in cyber security

291
Executives certified in Ethics
and Compliance

The anti-corruption compliance documents include
policies in areas such as gifts and entertainment (both toand from third parties), hiring candidates with government
connections and engaging and transacting business withthird parties. Business agreements are required to include
appropriate anti-corruption provisions.

41

01 Sustainable business

Whistleblowing mechanism
Since 2021, Hexagon has utilised a whistle-blower
reporting system to ensure consistent managementof whistle-blower reports. Hexagon uses the provider
Syntrio, Inc., a leading third-party provider of hotline
reporting systems. This solution enables Hexagon
employees, suppliers, business partners, and other
Hexagon stakeholders to submit confidential reportsof suspected legal or ethics violations to Hexagon via
secure mechanisms and through various communication
devices, such as telephone, the web, and email in many
languages. It also enables specific case managementof each instance and consistent recordkeeping. During2022, Hexagon received 25 reports through the whistleblower mechanism: all of which were fully resolved
and none of which were determined to constitute a
violation of applicable laws. In some cases, actions
such as training or changes of internal processes
were recommended, and in all such instances, the02 Solutions for the future
STRATEGY

03 People and culture
STRATEGY

recommendations have been or are currently being
implemented. For example, a FAQ on ”Conflict ofInterests” has been developed and communicated to
employees to better understand this topic as a result ofreporting activity during 2022.
Hexagon personnel are encouraged and required toreport any suspected non-compliance through a whistleblowing mechanism that ensures good-faith reports thatwill not be subject to retaliation. Personnel can makereports directly to managers or to appropriate contacts
through the whistle-blower hotlines. In the event ofan alleged incident of non-compliance with Hexagon’scompliance policies, Hexagon follows an establishedprocess to investigate the matter, establish the facts,
report findings, make recommendations to stakeholders,develop a mitigation plan, carry out appropriate actions
to ensure legal compliance and establish measures
to prevent similar issues from arising in the future.

04 Enabling change with consciousness
STRATEGY

05 Governance

06 The numbers

Hexagon’s Board of Directors reviews the activity of thewhistle-blower reporting system
Hexagon personnel are not only encouraged but required
to report any suspected non-compliance through awhistleblowing mechanism that ensures good-faithreports that will not be subject to retaliation. Personnel
can make reports directly to managers or to appropriate
contacts through the whistle-blower hotlines. In theevent of an alleged incident of non-compliance with
Hexagon’s compliance policies, Hexagon follows anestablished process to investigate the matter, establish
the facts, report findings, make recommendations
to stakeholders, develop a mitigation plan, carry out
appropriate actions to ensure legal compliance andestablish measures to prevent similar issues from arisingin the future.

25

100%

Number of whistleblower
reports

Resolved whistleblower
reports42

01 Sustainable business

02 Solutions for the future
STRATEGY

03 People and culture
STRATEGY

04 Enabling change with consciousness
STRATEGY

05 Governance

06 The numbers

Data privacy and cybersecurity
Cybersecurity
Hexagon’s Group Cyber Council was established in 2019to provide oversight and governance over all information
security matters. The Cyber Council is chaired by theGroup Privacy and Information Security Officer andincludes executive members representing all major
areas of the Hexagon business including Operations,
Legal, Finance and Product. The objectives of the
Cyber Council is to ensure protection of Hexagon’s
intellectual property, ensure the cyber resilience of its
networks and protect Hexagon’s customers throughits position in the supply chain. As a global leader indigital reality solutions, Hexagon understands theimperative of security within its products and services.

Code of Business Conduct & Ethics; Supplier Code

ESG

Data Protection

Competition

Trade(Customs & Export)

Ethics & Administration Manual

Public Contracting

In 2018, Hexagon selected to adopt the principles of theEuropean Union’s General Data Protection Regulations(“GDPR”) as its baseline for the protection of all personaldata, regardless of locality. GDPR is widely considered asthe ‘Gold Standard’ of Privacy Law and provides a robust
and reliable means to ensure personal information isprotected appropriately. Minor additions have been
adopted since 2018 to encompass other jurisdictionallaws as these have been enacted. Following the
introduction of updated Standard Contracual Clauses(SCC) by the European Union in 2021, Hexagon has beenworking to update all existing contracts and has revised
its contracting procedures to implement the new SCCs in
all new contracts. Under the SCCs, data transfers froman EU entity to a Third Country that does not provide
adequate data protection can only be made after theappropriate risk assessment has been conducted.
Hexagon has implemented a standard process to
conduct a suitable Data Transfer Impact Assessment(DTIA) in line with the legislation.

Hexagon recognises that the protection of personal
information is not a point in time process and requires
committed changes to technology, processes andpeople. All Hexagon employees are required to comply
with data protection principles and receive training
appropriate to their role. Employees with higher levelsof responsibility for the protection of personal data
are provided with advanced training and offered theopportunity to become certified professionals throughprograms provided by the International Association ofPrivacy Professionals (IAPP).

Anti-Corruption

Data privacy
Data Protection is one of the six pillars of Hexagon’scompliance program. Employees, customers, andpartners require assurance that their personal
information will be handled and managed in a safe andresponsible way. Hexagon is committed to ensuring all
personal information will be processed in accordancewith global best practices and this is reflected in its
Data Protection Compliance Program (DPC Program).
The Group Privacy and Information Security Officer
has responsibility for managing and overseeing theimplementation of the DPC Program across Hexagon
Divisions. Changes to the DPC Program and reported to
the Chief Compliance Officer and Audit Committee on aregular basis. The DPC Program is implemented throughteams within each division, with responsibility fordelivery managed by Divisional Privacy Officers.

Risk Management, Governance and Compliance Personnel
43

01 Sustainable business

The autonomous revolution relies on data as fuel andthe protection and integrity of this data is central to
Hexagon’s Innovation Process.
Hexagon continued to build and develop its employee
awareness programme throughout 2022 and included
training on all key topics of security. All new employees
receive a set of baseline training courses and are thenincluded in the ongoing annual programme of events.
Additionally, employees are frequently targeted byphishing simulations using a wide range of phish lures
to both train and test employees on how to identify
email-based threats. Phish simulations are run in
multiple languages to match real world threats as
closely as possible.
During 2022, Hexagon realigned its security strategy
with a focus on a global, unified approach. Legacy
technology solutions are being replaced with next
generation security platforms and global service teams
to provide improved alignment to business needs andsecurity threats.

02 Solutions for the future
STRATEGY

03 People and culture
STRATEGY

04 Enabling change with consciousness
STRATEGY

05 Governance

06 The numbers

Hexagon recognises that not all cyber risks can be
mitigated through implementation of security controls.
Cyber-criminal activity and particularly Advanced
Persistent Threat (APT) groups present a sophisticatedthreat to all commercial enterprises. A criticalcomponent of any cyber resiliance programme is a robust
and rehearsed incident response plan. Hexagon workwith global, leading Managed Security Service providers
to assist with testing its incident response capability.
Response plans are reviewed by external consultantsand desktop, scenario based exercises conducted toensure that both the plans and also that the crisis teams
decision making ability are robust. To compliment its
technical and organisational controls, Hexagon takes
a responsible view to transfer some of the residual
risk to a cyber insurance program. Hexagon works withleading cyber insurance brokers and a consortium of
underwriters to ensure an appropriate level of cover isprovided to protect against data losses and business
continuity interruption.

Employees with higher levels of responsibility for the protectionof personal data are provided with advanced training.
Stakeholders

Society

Investors

Customers

Regulators

Suppliers

Employees
44

01 Sustainable business

02 Solutions for the future
STRATEGY

03 People and culture
STRATEGY

04 Enabling change with consciousness
STRATEGY

05 Governance

06 The numbers

Sustainability-related risks
Hexagon’s risk management activities are designed to identify, control and reduce risks associatedwith its business. The majority of these activities are managed within each division of Hexagon.
However, certain sustainability related risks are managed at a Group level.
The management of sustainability related risks are
predominantly managed at a divisional level to allow
for prioritisation of focus areas across the divisions
differences across operational contexts. Below is an
overview of the Group wide sustainability related risks
that have been identified, prioritised and which aremanaged at a Group level.
The basis for Hexagon’s sustainability work is the
Hexagon Code of Business Conduct and Ethics, which
is based to the ten principles of the UN Global Compact
on Human Rights, Labour, Environment and AntiCorruption. The Hexagon Code of Business Conduct andEthics covers issues such as fair employment, diversity,
non-discrimination, workplace safety, privacy andprotection of personal information, the environment, faircompetition, and anti-corruption.
The Hexagon Code of Business Conduct and Ethics
applies to all Hexagon employees and guides
interactions with customers and suppliers. The Codeof Business Conduct and Ethics extends beyond legal
compliance and reflects Hexagon’s responsibility asa market leader to uphold the highest standards of
ethics and compliance. In addition, Hexagon has acomprehensive Group wide Compliance Programme
and manuals including anti-corruption, data privacy,
export controls, government procurement, customs andcompetition matters.

All companies in the Group are required to adopt andimplement the Hexagon Code of Business Conduct andEthics and with the specific compliance programmes
established pursuant to the Code of Business Conduct
and Ethics, including guidance and proceduresthat implement the compliance programmes at the
local level (collectively, “Compliance Programmes”).
The Hexagon Board discusses and evaluates thesustainability related risks yearly.
Sustainability-related risks
Hexagon has identified sustainability related risks inhuman capital, compliance, environment and humanrights and defined mitigation measures to address them.

Hexagon has a comprehensive Groupwide Compliance Programme andmanuals including anti-corruption,
data privacy, export controls,
government procurement, customs
and competition matters.”

45

01 Sustainable business

02 Solutions for the future
STRATEGY

03 People and culture
STRATEGY

04 Enabling change with consciousness
STRATEGY

05 Governance

Sustainability area

Sustainability-related risk

Mitigation efforts

Employees and human capital related risks• The resignation of key employees or Hexagon’s failure to attract skilled
personnel may have an adverse impact on the Group’s operations.

• Hexagon works with a structured approach to HR and market-based
remuneration to ensure employee satisfaction.

Legal and compliance related risks• Hexagon’s main markets are subject to extensive regulation. Hexagon’s
operations may be affected by regulatory changes, government legislation andrestrictions in the countries where Hexagon is active.

• Hexagon has a solid compliance programme in place, covering the entire
Group, including policies, processes and training to ensure that compliancewith relevant laws and regulations are always top-of-mind.

06 The numbers• Any breach of export control regulations, data privacy laws, anti-corruption or
anti-trust regulations would be damaging to Hexagon’s reputation and sales
opportunities, and would have significant legal implications.

Environment• Stricter regulations on environmental matters can result in increased costs orfurther investments for the companies within Hexagon that are subject to such
regulation.
• Significant negative environmental impacts by Hexagon’s production
companies or suppliers may lead to financial fines, loss of license to operate
and reputational damage.

Human Rights related risks• Unmanaged negative impacts on human rights, i.e. through inadequate labour
conditions in the supply chain could entail a reputational risk for Hexagon.
• Unmanaged negative impacts in companies owned or acquired by Hexagon
could entail a reputational risk.
• On the customer side, Hexagon may face risks if customers misuse thecompany’s products in ways that infringe on human rights. Hexagon provides
key products to a number of industries, including the defence industry (4% ofsales).

• Hexagon has set ambitious carbon reduction targets and implemented
a sustainability programme to increase renewables and decrease
environmental stress in its operations. The company has implemented
ISO 14001 at the majority of the largest production sites and closely follow
rules and regulations at a divisional level to ensure compliance and lower
biodiversity risks.

• Hexagon has a Supplier Code of Conduct in place for suppliers to managesocial and ethical risks, which is a mandatory qualifying condition for
Hexagon to enter a business relationship with Supplier.
• Human rights are addressed in Hexagon’s Code of Business Conduct andEthics as an integrated part of the due diligence process for acquisitions
Hexagon ensures that the target support human rights.
• Hexagon has a solid compliance program in place also covering export
control regulations to prevent products from being sold to repressive
regimes.

46

01 Sustainable business

02 Solutions for the future
STRATEGY

03 People and culture
STRATEGY

04 Enabling change with consciousness
STRATEGY

05 Governance

06 The numbers

Materiality analysis - Hexagon’s key stakeholders
and related sustainability issues
Managing sustainability opportunities and risks is a key element in all successful business models, irrespective of what industry or region a company
operates in. Hexagon is committed to understanding the sustainability issues of its key stakeholders – society, employees, customers, investors andregulators – as they are forming the business landscape. Only through a continuous dialogue can Hexagon meet and surpass their needs.
Hexagon navigates the transformative environment by taking a proactive approach to sustainability, ensuring it acts in an ethical, socially andenvironmentally responsible way to all its key stakeholders.
1. Society
Stable, well-functioning andprospering societies are a criticalprerequisite for Hexagon to be able
to operate and do business. Only
by adopting sustainable processes
and proactively contribute toimproving the health and safety forthe citizens and future generationsof its communities can it ensure
a long-term sustainable businesslandscape with prospects for
growth. Clean energy supply,
access to fresh water and air,strong infrastructure systems
and safe constructions are
sustainability issues that Hexagon
actively can address through its
solutions and market presence.
In order to contribute to healthysocieties in a focused manner,
Hexagon has developed a longrange of sustainable solutions forcities and nations, aiming to ensurethat governments, industry, andcitizens can work together to build
safe and vibrant communities that
support the highest quality of lifeand sustainable economic vitality.

2. Employees
Attracting, hiring, developing
and long-term retention of thebest employees in the industry
is key to Hexagon’s success. The
company employs more than
24,000 people globally, many ofwhom are highly skilled engineers
and software developers. With afocused approach on competencedevelopment, anti-discrimination,
diversity, employee engagement
and health and safety, Hexagon
can remain long-term competitive
with its peers, irrespective of
where it operates.

3. Customers and suppliers
The customers and suppliers of
Hexagon in all industries havea growing need for sustainable
solutions that lower emissions,
reduce waste and spillage, increasesafety and efficiency, protect data
privacy, and secure high standards
in their supply chain. By actively
and incorporating the customers’sustainability issues into its productdevelopment and processes,
Hexagon can protect and secure
new business opportunities while
contributing to a more sustainablebusiness landscape.

4. Investors
In order to confidently be able
to evaluate and assess the ESG
related risks and opportunities
in its portfolio, the investor
community expects a high degreeof transparency and clarity in allareas related to sustainability
from their portfolio companies.
By meeting and surpassing theinvestors’ requirements, Hexagon
can ensure long-term viable
funding and prospects for growth.

5. Regulators
Regulators in all countries
need to ensure the companies
operating under their legislation
follow all applicable laws, withstrict requirements on anticorruption, responsible supply
chain management, accountability,
human rights, labor management,
and export control. With strong
internal processes and policies for
management of compliance andbusiness ethics together with ahigh degree of transparency andclose collaboration with authorities
in the regions it conducts business,
Hexagon can be a role model inbuilding sustainable businessprocesses and be compliant withall commercial laws and ethicalguiding principles.

47

01 Sustainable business

02 Solutions for the future
STRATEGY

03 People and culture
STRATEGY

04 Enabling change with consciousness
STRATEGY

05 Governance

06 The numbers

Stakeholder dialogue and materiality assessment
Hexagon has a continuous dialogue with key stakeholders through different channels depending on the stakeholder group
Dialogue with key stakeholders takes place both through Hexagon’s divisions and at Group level. Dialogue with internal and external stakeholders has been conducted through qualitative interviews,
surveys and workshops. The outcome of the stakeholder dialogue is the basis of Hexagon’s materiality assessment which determined the most material sustainability issues for the Group to prioritise.

Material sustainability issues

MediumHigh

Importance to external stakeholders

Materiality assessment• Anti-discrimination and diversity,
inclusion and equality• Supply chain management• Anti-corruption

Solution-related contributions

Compliance• Data-security and integrity• Digitalisation• Anti-corruption• Digitalisation• Quality• Export to risk countries and risk industries• Employee engagement• Energy and resource efficiency• Data privacy and integrity

Financial

Employee engagement• Economic value• Health and safety• Health and safety• Quality• Integration of acquisitions• Greenhouse gas• Competence• Reduction of waste• Economic value• Logistics and transportation• Energy and resource efficiency• Social engagement• Export to risk countries andrisk industries• Materials and chemicals• Remuneration and otherworking conditions• Integration of acquisitions

Environmental• Energy and resource efficiency

Responsible value chain• Supply chain management• Employees• Competence• Anti-discrimination, diversity, inclusionand equality

MediumHigh

Importance to Hexagon’s business48

01 Sustainable business

02 Solutions for the future
STRATEGY

06

03 People and culture
STRATEGY

04 Enabling change with consciousness
STRATEGY

05 Governance

06 The numbers

Thenumbers
Hexagon gathers sustainability-related data on Scope 1, 2 and 3 CO2 emissions, water,
waste, supplier risks, employees, whistleblower reports, and more. In 2022, the scopefor all data segments was expanded to cover all entities and employees in the company.

49

01 Sustainable business

02 Solutions for the future
STRATEGY

03 People and culture
STRATEGY

04 Enabling change with consciousness
STRATEGY

05 Governance

06 The numbers

Sustainability data
Hexagon sustainability journey is determined by the role its products and solutions play in the market, as well as its own
processes and actions. The overview of key performance indicators for environmental and social data covers all subsidiaries.
Responsible operations
The number of facilities included in the reporting increased
significantly 1 to include all of Hexagon’s sites in 2022, explaining
the total increase in CO2 emissions. The CO2 emissions per m 2 weredecreased during the year.
Stationary combustion energy consumption, (MWh)Responsible supply chain management
During 2022, Hexagon audited an additional 19.6% of its key suppliersin risk countries. The cummulated share of audited suppliers in risk
countries is 52% in 2022, with the goal of reaching 100% by 2023.

2022

2021

14,308

10,078# Key direct procurement suppliers

2022

2021

928

926

GHG emissions from stationary combustion (scope 1), (tCO2e)

2,742

1,890

# Key direct procurement suppliers in risk countries

56

75

GHG emissions from own vehicle fleet (scope 1), (tCO2e)10,395

6,335# of audits of key direct procurement suppliers

80

242

Share of electric vehicles of total company car fleet, (%)

4.6

n/a

# of audits of key direct procurement suppliers in risk countries2

11

18

Grid electricity consumption, (MWh)91,25453,836

Renewable energy produced by solar farm delivered to grid, (MWh)23,000

n/a

64

99

32

63

GHG emissions from electricity (scope 2), location-based, (tCO2e)

30,08624,100GHG emissions from electricity (scope 2), market-based, (tCO2e)27,482

20,157

GHG emissions /m2 , (Scope 1+2 energy consumption), kgCO2e)

38

51

34.8

30.5

GHG emissions from business travel (scope 3), (tCO2e)21,501

17,468

Total waste generated, (tonnes)

8,342

1,193
628

Renewable energy from purchased electricity, (%)- of which sent to recycling, (tonnes)

7,490- of which hazardous waste, (tonnes)

212

73

GHG emissions from waste, (scope 3), (tCO2e)

812

271

Water use, (m3)363,090982,000

GHG emissions from water use, (scope 3), (tCO2e)

45

146

ISO 14001 certified production sites, (#)

27

23# of major non-conformances found in audits of key direct
procurement suppliers# of solved major non-conformances in audits of key direct
procurement suppliers3

In 2022, Hexagon wasrecognized as ’Top ESG
performer’ out of morethan 5,000 companies in
Sustainalytics’ ratings
universe.

1) In 2021, 48 facilities were included in the reporting, covering all larger offices and production sites. In 2022, the reporting scope was expanded toinclude offices with less than 35 FTEs, explaining the total yearly increase in carbon emissions and total yearly decrease in carbon emissions per m2.
2) Risk countries defined by the United Nations Environment Programme Finance Initiative (UNEPFI) and Transparency International.
3) All open non-conformances expected to be solved in 2023.

50

01 Sustainable business

02 Solutions for the future
STRATEGY

Employees
The share of female managers increased to 23% in 2022 compared
to 21% in 2021, moving towards the goal of 30% women in leading
positions by 2025.
2022

2021

11

9

Voluntary attrition rate, total workforce, %Voluntary attrition rate, men / women, %

11/11

9/9

Gender distribution, total workforce, %

76/24

77/23

Management1 split by gender, men / women, %

77/23

79/21

Board of directors split by gender, men / women

60 / 40

60/40

73

n/a

Employee engagement level, %Average work tenure in years
Lost days from work-related injury

7

8

342

512

Employees trained in diversity, equality & inclusion

19,562n/a

Employees trained in cyber security

22,560n/a

Employees trainined in Code of Business Conduct

23,531n/aCompliance and business ethics
A total of 25 cases were submitted through the third-party
whistleblower service in 2022. All cases were fully resolved.

Ethics & Compliance System, executives certified

2022

2021

230

225

Whistleblower reports

25

7

Solved whistleblower cases

25

7

1) M
 anagement is defined as group management, divisional management, and managers
reporting to group or divisional management.

03 People and culture
STRATEGY

04 Enabling change with consciousness
STRATEGY

05 Governance

06 The numbers

Methodology for GHG emissions and waste.
Hexagon started tracking GHG emissions of its operations in 2020
focusing on production sites and the largest offices. The scope hassince been extended yearly by adding more sites and CO2 inventories,
today consolidating CO2 related emissions of all operations withmore than 35 FTE. The data was converted into tCO2e (tonnes CO2equivalents) using an online tool provided by CEMAsys. To capture
the CO2 emissions for the total number of employees globally also
including sites with below 35 FTE, the company estimates andadds the remaining emissions by extrapolating the consumption
and associated CO2 emissions for Scope 1 and 2 per employee withcomparable facilities and business.
Organisational Boundaries:
Hexagon’s organisational reporting boundaries cover all our
subsidiaries. These are fully consolidated, following the control-based
approach.
Operational boundaries:
Hexagon has completed a company-wide scope 1 and 2 emissions
inventory. To calculate the GHG emissions Hexagon has followed
the GHG Protocol Corporate Accounting and Reporting Standard –revised edition, and GHG Protocol Scope 2 Guidance from WRI and the
WBCSD. The company reporting include certain categories of scope
3 in accordance with the GHG Protocol Corporate Value Chain. The
reporting scope currently covers:• Stationary combustion, electricity consumption, water and waste
related emissions from all production all sites and offices.
• Emissions related to company owned vehicles and business travelof all the entities/subsidiaries are being accounted for. A small
share of the trips are paid directly by the employee and no centralcompany-wide tracking is currently available for this, meaning there
is a risk that not all travel has been accounted for. All employee
travel is expected to be reported in the coming years.
51

01 Sustainable business

02 Solutions for the future
STRATEGY

03 People and culture
STRATEGY

04 Enabling change with consciousness
STRATEGY

05 Governance

06 The numbers

EU Taxonomy
This is the second EU Taxonomy report by Hexagon. Hexagon deems its Taxonomy eligible revenue during 2022 to beapproximately 1.1% of its total turnover. While being an enabler of sustainability, the significant majority of Hexagon’s businessactivities are currently not defined in the EU Taxonomy and therefore will not be eligible with the technical screening criteria.
Hexagon applied the precautionary principle to determine applicable eligible activities and excluded activities not clearly
defined in the EU Taxonomy.

Hexagon used the EU delegated acts and supporting NACE code
information to determine its eligible activities. Of the total 2022
revenue, 1.1% is eligible and 0.06 % is aligned with the EU Taxonomy.
Hexagon has interpreted its relevance in the EU Taxonomy in four
sections under Climate change mitigation;• 4.1 “Electricity generation using solar photovaltaic technology”• 6.14 “Infrastructure for rail transport”• 6.15 “Infrastructure enabling road transport and public transport”• 8.2 “Data-driven solutions for GHG emissions reduction”.

Total EU Taxonomy-related eligible revenue, OpEx and CapEx
2022
MEUR

2021
2022
2021
MEUR % of total % of total

Total eligible revenue

57.91

51.25

1.1%

1.2%

Total eligible OpEx

12.15

9.90

0.6%

0.6%

Total eligible CapEx

16.70

17.40

3.0%

4.1%

The eligible economic activities for Hexagon under 4.1. “Electricity
generation using solar photovaltaic technology” are associated with
the Archidona solar park Hexagon acquired and operated during 2021.
The eligible economic activities 6.14 “Infrastructure for rail transport” and6.15 “Infrastructure enabling road transport and public transport” areassociated with Hexagon’s professional surveying and mapping services.
The eligible economic activity 8.2 “Data-driven solutions for GHG
emissions reduction” is associated with simulation technologies used
for modelling with the purpose of enabling GHG emission reductions insustainability related projects. The reported turnover, CapEx and OpEx
are screened from these activities using a case-by-case approach inregard to the end usage of the solutions among the customers. Thisapproach ensures the correct revenue, CapEx and OpEx is attributed
to each economic activity.
Alignment:
The activity 4.1 Electricity generation using solar photovoltaic
technology (the Archidona solar park) fulfils the EU Taxonomy criteria
for alignment:
Technical screening criteria:• The activity has substantial contribution to climate change
mitigation as it generates electricity using solar PV technology.

Do No Significant Harm:• The activity meets the criteria for DNSH to climate change
adaptation set forth in Appendix A in the Delegated Act (2021) 2800,
by performing a robust climate risk and vulnerability assessment
proportionate to the scale of the activity and its expected lifespan.
The climate projections and assessment of impacts are based onbest practice and available guidance and take into account thestate-of-the-art science for vulnerability and risk analysis andrelated methodologies.
• The activity activity complies with the criteria set out in DelegatedAct (2021) 2800 for activity 4.1. for transition to a circular economy
as it assesses availability of and uses equipment and components ofhigh durability and recyclability and that are easy to dismantle andrefurbish.
• The activity complies with the criteria set out in Appendix D in the
Delegated Act (2021) 2800, as an environmental impact assessment
was completed and the required mitigation and compensation
measures for protecting the environment are implemented.
Minimum Safeguards:• The company meets the criteria of the Minimum Safeguards set
forth in the EU Taxonomy, as it has established processed andpolicies for due diligence of Human Rights, Corruption, Taxation andFair Competition based on the EU Guiding Principles.

52

01 Sustainable business

02 Solutions for the future
STRATEGY

The activities 6.14 and 6.15 for Hexagon’s professional surveying andmapping services do not meet the technical screening criteria set
forth in the EU Taxonomy and are not considered aligned. While theactivities support climate change adaptation and do no significant
harm to the other environmental goals, there is currently not enoughproduct use data available to fully comply with all technical screening
criteria set forth in the Delegated Act (2021) 2800.
The activity 8.2 for Hexagon’s simulation technologies used formodelling with the purpose of enabling GHG emission reductions insustainability related projects does not meet the technical screening
criteria set forth in the EU Taxonomy and is not considered aligned.
While the activity support climate change adaptation and do no
significant harm to the other environmental goals, there is currently
not enough product use data available to fully comply with all technicalscreening criteria set forth in the Delegated Act (2021) 2800.

03 People and culture
STRATEGY

04 Enabling change with consciousness
STRATEGY

Definitions:• The total turnover corresponds to Net sales in the consolidated
income statement in the Hexagon 2022 Annual Report. The turnover
KPI represents the proportion of the turnover derived from products
or services that are taxonomy-eligible and taxonomy aligned. The
taxonomy-eligible activities were screened for associated turnover.
Hexagon revenue streams stem from the sales of information
technology solutions in which hardware and software are integrated
as well as services, licenses and other assignments. Revenue fromagreements with customers is reported in the income statement as
Net sales.
• CapEx is defined as investments in intangible assets excluding
goodwill and tangible assets such as property, machinery and otherequipment, together with the IFRS 16 right of use assets. The total
CapEx amount can be found in the Hexagon 2022 Annual Report innotes 14-16 in ”line investments and investments of business andline new contract”. The CapEx KPI represents the proportion of
the capital expenditure of an activity that is taxonomy-eligible andtaxonomy-aligned. The taxonomy-eligible activities were screened
for associated CapEx using cost types. The taxonomy-aligned CapEx
investments mainly consists of intangible assets.

05 Governance

06 The numbers• OpEx is defined as direct non-capitalised costs that relate toresearch and development, building renovation measures, shortterm lease, maintenance and repair and other direct expenditures
relating to the day-to-day servicing of assets of property planand equipment. The OpEx can be found under Sales expenses,
General and administrative costs and non-capitalized Researchand Development costs, as detailed in the Hexagon 2022 Annual
Report in note 6. The OpEx KPI represents the proportion of theoperating expenditure of an activity that is taxonomy-eligible andtaxonomy aligned. The taxonomy-eligible activities were screened
for associated OpEx using cost types. Own measures and purchased
output from suppliers economic activities have not been screened
for eligibility in 2022.
• The allocation of the turnover for eligible activities was prepared byusing product accounts. CapEx and OpEx were allocated by using
cost types. All activities were isolated when allocating turnover,
CapEx and OpEx to avoid double counting.

Own measures and purchased output from suppliers economic
activities have not been screened for eligibility in 2022.

53

01 Sustainable business

02 Solutions for the future

03 People and culture

STRATEGY

04 Enabling change with consciousness

STRATEGY

05 Governance

STRATEGY

06 The numbers

TurnoverSubstantial contribution criteria

Economic activities (1)Code(s)(2)

ProporAbsolutetion ofturnover turnover(3), MEUR(4), %

Climatechangemitigation(5), %

Climatechangeadaptation(6), %

Water andmarineresources(7), %

Circulareconomy(8), %DNSH criteria (Do No Significant Harm’)

ClimateBiodiversity change mitPollution and ecosys- igation (11),(9), % tems (10), %Y/N

Climatechangeadaptation(12), Y/N

Water andmarineresources,
Y/N (13)

Minimum
safeguards(17), Y/N

Taxonomy-aligned
proportion of
turnover, year
2022 (18), %Taxonomy-aligned
proportion of
turnover, year
2021 (19), %

Y

Y

0.06

-

-

-

0.06

-

Circulareconomy(14), Y/N

Biodiversity
and ecosysPollution
tems, Y/N(15), Y/N
(16)

Y

Category(enabling
activity/transitional activity) (20), %A. ELIGIBLE ACTIVITIES
A.1. Eligible Taxonomy-aligned
activities
Electricity generation using solar
photovoltaic technology

4.1

3.22

0.06

100%

-

-

-

-

-

-

Y

Turnover of eligible Taxonomy-aligned activities (A.1)

4.1

3.22

0.06

100%

-

-

-

-

-

-

-

Infrastructure for rail transport

6.14

7.19

0.14

Infrastructure enabling roadtransport and public transport

6.15

40.72

0.79

Data-driven solutions for GHG
emissions reduction

8.2

6.80

0.13

Turnover of eligible not Taxonomy-aligned activities (A.2)

54.71

1.06

Total (A.1 + A.2)

57.93

1.12

Turnover of non-eligible activities(B)

5102.59

98.88

Total (A + B)

5160.52

100

-

-

-

A.2 Eligible not Taxonomy-aligned
activities

0.06

B. NON-ELIGIBLE ACTIVITIES54

01 Sustainable business

02 Solutions for the future

03 People and culture

STRATEGY

04 Enabling change with consciousness

STRATEGY

05 Governance

STRATEGY

06 The numbers

CapEx
Substantial contribution criteria

Economic activities (1)Absolute
Code(s) CapEx (3),
(2)
MEUR

Proportion of
CapEx(4), %

Climatechangemitigation(5), %

Climatechangeadaptation(6), %

Water andmarineresources(7), %

Circulareconomy(8), %DNSH criteria (Do No Significant Harm’)

ClimateBiodiversity change mitPollution and ecosys- igation (11),(9), % tems (10), %Y/N

Climatechangeadaptation(12), Y/N

Water andmarineresources,
Y/N (13)

Minimum
safeguards(17), Y/N

Taxonomy-aligned
proportion of
CapEx, year
2022 (18), %Taxonomy-aligned
proportion ofCapex, year
2021 (19), %

Y

Y

2.34

-

-

-

2.34

-

Circulareconomy(14), Y/N

Biodiversity
and ecosysPollution
tems, Y/N(15), Y/N
(16)

Y

Category(enabling
activity/transitional activity) (20), %A. ELIGIBLE ACTIVITIES
A.1. Eligible Taxonomy-aligned
activities
Electricity generation using solar
photovoltaic technology

4.1

13

2.34

100%

-

-

-

-

-

-

Y

CapEx for of eligible Taxonomy-aligned activities (A.1)

4.1

13

2.34

100%

-

-

-

-

-

-

-

Infrastructure for rail transport

6.14

0.56

0.10

Infrastructure enabling roadtransport and public transport

6.15

3.15

0.57

Data-driven solutions for GHG
emissions reduction

8.2

0

0

CapEx for eligible not Taxonomy-aligned activities (A.2)

3.71

0.66

Total (A.1 + A.2)

16.71

3

CapEx for of non-eligible activities (B)

537.8

97

Total (A + B)

554.5

100

-

-

-

A.2 Eligible not Taxonomy-aligned
activities

2.34

B. NON-ELIGIBLE ACTIVITIES

55

01 Sustainable business

02 Solutions for the future

03 People and culture

STRATEGY

04 Enabling change with consciousness

STRATEGY

05 Governance

STRATEGY

06 The numbers

OpEx
Substantial contribution criteria

DNSH criteria (Do No Significant Harm’)Code(s)(2)

Absolute
OpEx (3),MEUR

Proportion of
OpEx(4), %

Electricity generation using solar
photovoltaic technology

4.1

0.056

0.003

100%

-

-

-

-

-

-

Y

OpEx for of eligible Taxonomy-aligned activities (A.1)

4.1

0.056

0.003

100%

-

-

-

-

-

-

-

Infrastructure for rail transport

6.14

1.245

0.06

Infrastructure enabling roadtransport and public transport

6.15

7.055

0.34

Data-driven solutions for GHG
emissions reduction

8.2

3.9

0.19

12.2

0.59

12.256

0.593

2062

99.47

2074.3100

Economic activities (1)Climatechangemitigation(5), %

Climatechangeadaptation(6), %

Water andmarineresources(7), %

Circulareconomy(8), %

ClimateBiodiversity change mitPollution and ecosys- igation (11),(9), % tems (10), %Y/N

Climatechangeadaptation(12), Y/N

Water andmarineresources,
Y/N (13)

Minimum
safeguards(17), Y/N

Taxonomy-aligned
proportionof OpEx, year
2022 (18), %Taxonomy-aligned
proportionof OpEx, year
2021 (19), %

Y

Y

0.003

-

-

-

0.003

-

Circulareconomy(14), Y/N

Biodiversity
and ecosysPollution
tems, Y/N(15), Y/N
(16)

Y

Category(enabling
activity/transitional activity) (20), %A. ELIGIBLE ACTIVITIES
A.1. Eligible Taxonomy-aligned
activities

-

-

-

A.2 Eligible not Taxonomy-aligned
activities

OpEx for eligible not Taxonomy-aligned activities (A.2)
Total (A.1 + A.2)

0.003

B. NON-ELIGIBLE ACTIVITIESOpEx for of non-eligible activities(B)
Total (A + B)

56

01 Sustainable business

02 Solutions for the future
STRATEGY

03 People and culture
STRATEGY

04 Enabling change with consciousness
STRATEGY

05 Governance

06 The numbers

Auditor’s report on the statutory
sustainability report
To the general meeting of the shareholders in Hexagon AB (publ),
corporate identity number 556190-4771

Engagement and responsibility
It is the board of directors who is responsible for the
statutory sustainability report for the year 2021 andthat it has been prepared in accordance with theAnnual Accounts Act.

OpinionA statutory sustainability report has been prepared.

The scope of the audit
Our examination has been conducted in accordancewith FAR’s auditing standard RevR 12 The auditor’sopinion regarding the statutory sustainability report.
This means that our examination of the statutory
sustainability report is substantially different and lessin scope than an audit conducted in accordance with
International Standards on Auditing and generally
accepted auditing standards in Sweden. We believethat the examination has provided us with sufficientbasis for our opinion.

Bo Karlsson
Authorized Public Accounts
Lead partner

Stockholm, March 31, 2023
PricewaterhouseCoopers AB

Helena Kaiser de Carolis
Authorized Public Accounts

57

01 Sustainable business

02 Solutions for the future
STRATEGY

03 People and culture
STRATEGY

04 Enabling change with consciousness
STRATEGY

05 Governance

06 The numbers

About the report
This is Hexagon’s sixth sustainability report, covering
the fiscal year of 2022 (1 January - 31 December). The
report, published 31 March 2023, has been preparedin line with the EU directive on mandatory annual
disclosures of non-financial information. The reportfocuses on company-wide sustainability performanceand the management approach to Hexagon’s material
sustainability issues. Hexagon’s report has not beenexternally assured. The annual report can be found on:
investors.hexagon.com

Hexagon AB
P.O. Box 3692
SE-103 59 Stockholm, Sweden
Visiting address
Lilla Bantorget 15, Stockholm
Telephone: +46 8 601 26 20
E-mail:info@hexagon.com
Website:hexagon.com
58