Sustainability
Report2023

Sustainability
Report2023
Clare, Firefighter andDemant
Oticonhearing aid
user1GroupCEO letter

Business areas

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CEO letter

Group

Business areas

The Demant GroupCEO letter
Who we are
Sustainability governanceMaterial topics
Group targets and performance

6
7
11
12
13

Life-changing hearing health
Our most important contribution

15

PeopleCare at our core
Human leadership
Engaged at work
Embrace diversity
A safe place to work

19
20
21
23
26

Caring for climate
Climate impact

29

Committed to high ethics
Ethics and governanceBusiness ethics programme
Data and IT

34
35
38

Our business
Hearing Aids
Hearing Care
Diagnostics
Communications

Appendices
40
45
48
53

Appendices
Reporting scope and requirements
EU Taxonomy
Accounting policies
Additional GRI data
GRI content index

58
59
63
65
66

This report serves as the statutory report to be presented under the sections
99a, 99b, 99d and 107d of the Danish Financial Statements Act. We also disclose requirements of the EU taxonomy on sustainable activities on page 60.

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CEO letter

Sustainability key figures – year
Following the decision to discontinue our Hearing Implants business, financial and sustainability
figures have been aligned to reflect this in 2022. Historical figures have not been restated, unlessotherwise stated.
2023

2022

2021

2020

2019

Core
R&D costs (DKK million)

1,410

1,314

1,139

1,261

2023

2022

2021

2020

2019

CEO remuneration ratio (times)

48

39

38

35

34

Whistleblower reports (#)

90

47

48

Product recalls (#)

0

0

1

0

0

Business ethics and governance

1,120*2019-2022 restated due to adjustment of baseline in order to account for the new acquisitions**Estimate based on spend-based materiality assessment for 2019 and adjusted for revenue growth in local currency

PeopleAverage number of employees

21,16819,23916,866

16,155

15,352

Gender diversity, top-level management (women/men%)

27/73%

23/77%

22/78%

Gender diversity, top-level management teams (on/not on target%)

79/21%

71/29%

65/35%

Gender diversity, all managers(women/men%)

47/53%

44/56%

43/57%

42/58%

41/59%

Gender diversity, board of directors(women/men%)

40/60

40/60

40/60

40/60

20/80

Engagement rate (1-5)
New hire rate (%)

4.11

4.08

4.02

3.93

3.82

3.3

2.9

2.8

Employee turnover (%)

23

26

20

Accidents in production

19

17

12

11

13

Energy consumption (MWh)114,227

108,163

91,41577,48187,330Electricity consumption (MWh)51,421

51,77653,267

40,66842,101

Renewable electricity share (%)

21

Find accounting policies on page 63

Climate and environment*

Scope 1 and 2 CO2e emissions (market-based) (tonnes)

30,46935,862

31,721

27,33528,433

Scope 1 CO2e emissions (tonnes)

12,316

11,061

7,546

7,391

9,594

Scope 2 CO2e emissions (marketbased) (tonnes)

18,15324,801

24,175

19,943

18,839

Scope 3** CO2e emissions (tonnes)

793,306

691,434

657,639

514,053524,667

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CEO letter

Despite living with adisease that causes
both visual and hearing
impairment that worsens
over time, my motto is:
Disability is not inability.
Peter, Pensioner, Ironman

The Demant Group
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Through life-changing hearing
health, we contribute tobuilding a more sustainable
world.

Untreated hearing loss
impacts our ability to interact,contribute and belong. And thelink between untreated hearing
loss and cognitive health issues
grows more evident.

If we can enable more people
to hear better, we can givethem the opportunity to bepart of society without
constraints.
We empower them to tune into life for the good of everyone.

–

Where all people have theopportunity to enjoy an active
life.

Assessing your hearing is thefirst step towards better hearing, but many hearing losses goundetected.

Life-changing hearing health.
Benefits everyone.

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CEO letter

CEO letterthe stage for our Demant culture, and as
we become an increasingly people diverse
company, we must uphold these corevalues. I still experience our values being
lived out thoroughly across Demant, andthis makes me very proud of our company.
With impact comes responsibility
To lead a responsible business, it is pivotal
for Demant to be aware and capable ofseizing opportunities and mitigating risksof environmental, social and governancetopics related to our business.

In many ways, 2023 was a truly good year
for Demant. Over 200 million people had
their hearing screened and diagnosed withan instrument from our Diagnostics business. Compared to last year, more people
visited Audika stores than ever before andmore people were fitted with hearing aids
from one of our brands.
None of this would be possible without thebrilliant, innovative and diverse people of
Demant, driven by a common purpose of
making a difference. They all have every
reason to be proud of what we do.
The Demant culture
This year, we have welcomed many new
people into the Group, and when doing so,
we all have a responsibility to meet our
new colleagues with respect, openness
and trust. It is a core priority for me to set

As we grow in size, we also grow ourimpact on health and innovation, as wellas our ambition to improve as many lives
as possible. While we reach more people
with hearing healthcare, growing ourbusiness also comes with new risks ofhaving a negative impact on society andon nature.
While we see increased legislation withincorporate sustainability and ESG globally,
we also acknowledge and appreciate theextended pressure and focus on sustainability, that we experience from big customers and partners.
Improving lives
When millions of people are enabled totune in to life and live an active life, it
benefits everyone. And 2023 was indeed atestament to our purpose of providing lifechanging hearing health, as this report will
also demonstrate.

Based on ten years of research ourDiagnostics business area launched anew, ground-breaking diagnostic test
method. The test method, Audible Contrast
Threshold™, goes beyond the audiogramand its results address the number one
challenge for people with hearing loss:
hearing in noise.
Moving the needle on diversity targets
Part of our cultural commitment toeachother is to have workplaces thatreflect a diverse world where everyone cancontribute and belong. And when theworld is filled with disagreements anddevastating conflicts, community andsense of belonging is more important thanever.
Our continued efforts within diversity,
equity and inclusion have borne fruit, and I
am pleased to see that we have madegood progress on both of our gender
diversity targets. We enhanced
inclusiveness in recruitment, performanceand development processes, as well as
leadership training, and our approach toleading with authenticity, empathy andadaptability is a key driver in this. I am
happy to see this work reflected in our
global inclusivity score.
Road towards net zero
We take part in the world’s transition to
net zero and continue to integrate ourclimate strategy into our business andoperations. This year, Demant’s emission

reduction targets were approved by the
Science Based Targets initiative, stressing
our net zero ambitions for 2050.
We tackle emissions from our own
operations by focusing on energy
efficiency and consumption reduction,
while we work towards transitioning to
renewable electricity.
Most of Demant’s footprint is to be foundwithin our extended value chain. This year
we took further steps into engaging with
our key suppliers and manufacturers intheir transition to renewable energy andimproved environmental performance.
Nations, companies and consumers allneed to take part in fighting climatechange and collaborate on initiatives thatcan urgently reduce global emissions. Certainly, we can and must move the needle
on reducing our own direct and indirectemissions, but when it comes to the entire
value chain, we cannot do it alone.
In Demant we say that caring for people’s
health and well-being goes hand in handwith caring for society and for the planet.
And while we must pay attention to all aspects of sustainability, there is no doubtthat Demant’s biggest impact always will
come from creating life-changing hearing
health.
Søren Nielsen
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Who we are

Who we are
Our purpose is to create life-changing differences through hearing
health. Our products and services, and the way we work, enable users
and employees to tune in to the things in life that matter.
For 120 years, Demant has developed anddelivered hearing health. This is our corebusiness.
We report on our financial performance in
our Annual Report 2023, where additional
information about the Demant Group andour business areas can be found.

Learn more about sound, audio
and good hearing, our purpose
and strategy and our history
on our website.

Our business

We operate in the four business areas
Hearing Care, Hearing Aids, Diagnostics
and Communications. Within each area,multiple brands serve their individual markets according to their business area strategy.

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Who we are

Value chain

No matter where in our value chain, we
aim for the highest level of quality and performance, building on existing knowledge
as well as new, emerging technologies.
The green icons represent Demant’s own
operations. found.

Hearing healthcare

Communications

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Who we are

Our global presence
The Demant Group has more than 21,000 employees around the world.
––
We have companies in over 30 countries, clinics in 26 countries and ourheadquarters is located in Demark. Through distributors, we ensure a global
coverage in countries where we are not directly present.

Production
North America

Service and customisation:
Canada and the US.
Main production in hearing
healthcare business activities:
Mexico.

EuropeRevenue

Revenue41%

41%Service and customisation:
Germany, Italy, Turkey and the UK.
Main production in hearing
healthcare business activities:
Denmark, Italy and Poland.

RevenueAsia

10%Service and customisation:
China, Japan and South Korea.

Other countries
Service and customisation:
Brazil and South Africa.

Around 60 distributors in lowmiddle income countries provide
access to hearing health andengage in local initiatives, NGO
partnerships and charitableprojects.

Revenue

3%

Pacific

Service and customisation:
Australia.

Revenue5%

Demant Sustainability
Sustainability Report
Report 2023
2023
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Who we are

A story from Demant

Founded on care
William Demant Foundation reinvests in society by donating toaltruistic causes and by expanding its sustainable investments.
In 1957, the Demant family donated theirshares in their company and established
William Demant Foundation, which holds
the majority of the shares in Demant.
This unique ownership model provides
stability and ensures that we remain a reliable and trusted long-term partner.

With the donation, Demant Turkey wasable to:••••In 2023, William Demant Foundation donated a total of DKK 135.1 million.

•

Enabled employee engagement•

The Foundation ownership is a central partof Demant. Aside from the Foundations’impactful investments in audiology of DKK
54.8 million in 2023, benefitting the field ofhearing healthcare, it also allowed Demant
employees to allocate resources to people
and society.
Support following earthquake
With the support of DKK 2 million from
William Demant Foundation, Demant Turkey has helped hundreds of people who
were affected by the severe earthquake in
Turkey in February 2023.

•

Help people with hearing aids via Demant’s local Hearing Care business
and wholesale customers.
Form partnerships with Deaf People
and Families Association.
Support customers in continuing todeliver hearing healthcare services.
Deliver screening devices to regional
hospitals.
Offer psychological support to employees and their closest relatives.

Procurement of ambulances and a fireengine brought to Ukrainian regions.
English lessons for Ukrainian children
in the Szczecin area in Poland.

Since March 2022, William Demant Foundation has donated DKK 10.5 million to relief-activities in and outside of Ukraine. In
total, DKK 3.5 million has been allocated toenable this type of employee engagementin Demant.

Relief-activities in Ukraine
In 2023, William Demant Foundation donated DKK 1.5 million to enable Demant
employees support Ukrainian refugees
through selected humanitarian organisations. Among other things, the donation resulted in:••

Vestibular screenings and treatment
for Ukrainian refugees in Poland.
Audiological examinations and hearing aid fittings for children in Ukraine.

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Who we are

Sustainability governanceOur governance model for sustainability and ESG ensures Groupoversight as well as flexibility and accountability in our business areas.
The Demant Sustainability Board is comprised of the Executive board as well as
leaders of our business areas, HR and Finance.

The Audit Committee oversees sustainability reporting, and the Board of Directors
evaluate progress on our strategic priorities twice a year.

The Sustainability Board meets every twomonths to review progress, give strategic
guidance on sustainability projects andensure alignment and traction in the business areas.

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Who we are

Material topics
We conducted a double materiality assessment that will inform strategic
decisions and guide reporting going forward.
In the process, we identified the most material ESG issues looking at our current andpotential positive and negative impact onsociety, as well as the financial impacts
and risks that the topics present to ourbusiness in the short or long term.

The assessment confirms our positive impact on society, bringing life-changing differences through hearing health to theglobal community of people living withhearing loss. At the same time, the assessment shines light on other impacts and opportunities as well as on the areas where
we have a risk of negative impact on society and nature.

usiness ethics
upplier relations

mployee engagement
etention, attraction

ro idinglife changing
hearing health

Di ersity, e uity,
inclusion andwell eing

Intellectual property

roduct uality
limate mitigation
ealth and safety

y er security

irculareconomylimateactionAd ocacy for hearing healthustaina lesupply chainor creationand optimisation

ositi e outcomesof treatment andtechnology

on material topics
Data ethics

Environment

SocialGovernance
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Who we areGroup targets and performance
Performance
2023

Targets
2025

2030

2050

Gender diversity
Share of women in top-level
management

Share of top-level management
teams with less than 75% of one
gender

27%

Trained leaders in inclusive leadership and unconscious bias, worked
with inclusive recruitment and leveraged emerging opportunities to secure better gender diversity

30%

75%

79%

EnergyShare of renewable electricity

21%

Invested in on-site solar power generation and secured green electricity
supplier agreements+7%*

Decreased emissions 15% compared
to 2022 primarily through transition
to renewable electricity

50%

100%

Emissions
Reduction in scope 1+2 emissions

Reduction in scope 3 emissions+51%*

Increased supplier engagement on
decarbonisation in hearing healthcare
and initiated life cycle assessment in
EPOS

-46%
Net zero emissions-46%*Compared to 2019 baseline

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Group targets and performance

Life-changing hearing health

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Life-changing hearing health

Our most important contribution
The differences we make for people living with hearing loss is our mostimportant contribution to society and to a more sustainable world.
Through decades of development, testing
and growing insights in paradigm-setting
technology and human interaction, ourcompany has a substantial impact on innovation within hearing health (SDG9),
supporting our long-term position to provide good health and well-being (SDG3).

The negative consequences of hearing loss
are widespread, affecting both the individual, surroundings and society at large. Andevidence suggesting that wearing hearing
aids may prevent or delay the onset andprogression of cognitive decline, such as
dementia1, continues to grow stronger.

e harness the Group’s competencies, innovative skills and resources in collaborative efforts with academia and other strategic partners.

Certainly, the positive impacts of hearing
healthcare are equally extensive.
When millions of people are enabled totune in to life and live an active life, it benefits everyone. And in 2023, we reachedeven more people with life-changing hearing health.

As a global hearing healthcare and technology group, Demant’s impact on healthis particularly strong when we delve into
this year’s achie ements in each usinessarea. See more on pages 40-57.

Delivering life-changing hearing health in 2023

Hearing care is healthcare

As people we interact with the world
around us through sound, and hearing isessential in our ability to share ourthoughts and feelings.

12024, Cantuaria ML, Pedersen ER, Waldorff FB, et al. Hearing Loss, Hearing Aid Use, and Risk of Dementia in Older Adults.

*Read more in accounting policies on page 63

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Life-changing hearing health

Improving global hearing health
When it comes to improving global health, we have a role to play.
We focus on and make strategic choices on how Demant can support
awareness, access and affordability to hearing healthcare, and mitigate
the risks that prevent this.
We believe that the optimal solution totreating hearing loss most efficiently includes a hearing care professional. In highincome countries, hearing care efforts
must focus on ensuring the full benefit
from treatment, and Demant fully supports
expanding access to hearing aids and offers a range of low-priced, easily accessible products.
In low- and middle-income countries, agerelated hearing loss is less prevalent due
to shorter lifetime expectancy. Here, thefocus is on children and on establishing theinfrastructure needed for assessment andtreatment.

To alleviate hearing loss, thefirst step is to become aware

We directly impact awareness through detection and identification of hearing loss:
•
•
•

•

We promote and market the benefitsof hearing care and technology
We are an industry partner in largescale research studies
We take an active part in the European Instrument Manufactures Association (EHIMA)
Every year, we promote
O’s World
Hearing Day and its quest to spreadawareness and increase adaptation

Making sure that more people
get access to treatment
We enable access to hearing healthcarewith our global presence:••

We provide direct access with morethan 3,500 clinics worldwide
Around 60 distributors in low-middle
income countries provide access tohearing health and engage in local initiatives, NGO partnerships and charitable projects

A positive impact on affordability
The dynamics of a highly competitive market, which is powered by innovation, results in competitive pricing.
••

Pricing in the hearing care market contains an essentially high level of service
and full return assurance
Products and services range from basic
to premium

Read more about our Hearing Carebusiness and its effort to increase
hearing healthcare awareness via
Campaign for Better Hearing.
your hearing is not good enough is fundamentally difficult, which creates a barrier inseeking the help needed and it slows the
progress with adaptation. It is hard to improve the landscape and reduce stigma
with hearing solutions alone.
Clinical research requirements
To gain insight, most of our research anddevelopment activities rely on access to
the right clinical population and clinicalmonitoring in the market.
Health infrastructure
While reimbursement programmes withvarying scopes are increasingly common in
many countries, especially in Europe, access to hearing treatment in low- and middle-income countries continues to be challenging.

As there is no infrastructure to support
hearing healthcare it is not possible to service hearing aids in these vulnerable communities. In Demant, we work with thischallenge by continuing to create awareness and work to improve access where
we can.
Ambiguous standards
The recommended age threshold for hearing tests can vary based on country. In
some places you assess at a late point inlife, which means that the hearing loss
could have been alleviated much earlier.
More streamlined and improved standards
can help mitigate this. To seize the opportunity, we engage in international projects
that focus on early hearing rehabilitation.

Mitigating risks
While we accept and mitigate the risks related to our core business, we continue toseize the opportunities that arise.
Accepting your hearing loss
We work to increase awareness of the importance of good hearing. Accepting that

Today, one in five people live withhearing loss, and due to an ageing
population, this number is increasing.

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Life-changing hearing health

A story from Demant

Groundbreaking hearing test
Demant’s Diagnostic usiness launched a new hearing test withpotential to become the new industry standard, tackling hearing aid
users’ num er one issue hearing in noise.
The first step towards better hearing is ahearing assessment and fitted hearingaids.
For more than 100 years, hearing aids
have – in terms of diagnostic tests – been
fitted solely based on the pure-tone audiogram, measuring hearing thresholds
across frequencies. This is very accurate
when it comes to measuring the quantityof a person’s hearing, but it tells us little
about the hearing-in-noise ability, or thequality of the hearing.
Based on 10 years of research in the Interacoustics Research Centre (IRU), Demant’s
Diagnostics business has launched a new,groundbreaking way of testing hearing.
The Audible Contrast Threshold™ (ACT) isa diagnostic tool that enables the hearing
care professional to measure this hearingin-noise ability. The test is objective andindependent of language, making it useable around the world with no language
barrier. In addition, it is a quick and intuitive test.

Benefits everyone

Group leverage

From next release, it will be possible to automatically transfer the ACT value to the
Oticon hearing aid fitting software.

This enables Oticon hearing aids to be automatically fitted and is a true testament
to the benefits of the Demant Group.

Together with the pure-tone audiogram,
ACT will enable hearing care professionals
to fit the hearing aids more accurately toindividual needs.
ACT is a result of deep collaboration andknowledge-sharing between IRU and Demant’s Hearing Aids business areas andwill be a step towards helping more people with hearing loss, benefitting both thehearing care professional, the client andthe ones close to them.

A game-changer

After the test, the clinician can manuallytransfer the ACT value to the hearing aid
fitting software and manually adjust thehearing aid.
The ambition is to make ACT an integral
part of best practice, and in this way, ACT
has the potential to make a meaningfulchange to hearing-aid fitting.

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Life-changing hearing health

People- the very core of Demant

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PeopleCare at our core
Demant’s values work to create a culture where everyone can belong,grow and contribute. The people in Demant are the most valuable partof our business, and their well-being, safety, engagement anddevelopment is fundamental to our success.
We protect labour rights and promote a
safe and secure environment. Through ourdiversity, equity and inclusion agenda(DE&I), we positively impact gender equality (SDG5). As a company, we can further
drive this contribution by ensuring that ouremployees have equal opportunities togrow professionally, reach personal goals
and contri ute to Demant’s success.

GovernanceWorking at Demant should be an enjoyable experience, both professionally andpersonally, as well as physically and psychologically.

We believe in a strong link between a highlevel of employee engagement and a successful and responsible business.
As an employer, we understand that to be
one of our core responsibilities. Ensuring
an inclusive culture, which fosters diversity
and continues to incite engagement, sustains Demant as a leading employer in our

industry, and is ultimately Demant’s management’s responsi ility.
Human Resources (HR) in the Group is
predominantly driven locally in the day-today business. Group-wide HR initiatives
are prioritised, managed and coordinated
via three main global forums all chaired by
Demant’s enior Vice resident of.
Read more on our website.

New image

Reaching further, we contribute to decent
work conditions and economic growth(SDG8) by creating good working conditions and offering quality jobs. By providing access to sound and good hearing, we
make it possible for people with hearing
loss to enter or stay in the labour market.

Behaviour

Trust is a core value in Demant. Following
the Group code of conduct, violence, bullying, harassment and discrimination of any
kind is unacceptable. This type of behaviour does not correspond with our beliefs
or the culture we want to convey. We encourage all employees to raise their concern through our whistleblower hotline.

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PeopleHuman leadership
In Demant, we put emphasis on leading people with a focus on
authenticity, empathy and adaptability.
Through human leadership, managers in
Demant enable professional and personal
development. This approach is central tohaving a healthy work environment as wellas to ensuring that we attract and retain
the right workforce with a skill set thatmatches business needs and challenges.
Through our leadership framework westrengthen and further develop leadershipcompetences and cultivate great leaders
to achieve goals in a sustainable way. Thisis also directly linked to our global engagement programme Pulse.

Development

We support both managers and employees in seeing all the exciting career opportunities that exist within the DemantGroup through different frameworks.

This year, 3000 employees were engaged
in learning more about audiology throughour global training platform.

TalentWe stay on the ball to remain an attractive
workplace, while improving business performance. We are highly dedicated to talent acquisition and retention and have initiatives supporting this. We benefit fromstrong company brands that attract talent
to Demant.
Many of the markets where Demant operates are at present characterised by a remarkably high demand for labour, especially in certain areas where we need specific competencies. Thus, the need to attract and retain the right people across
many facets of diversity increases.

Ensuring representation

Some Demant employees are supervisorsand external examiners at top universities
where they contribute with their expertise,
while displaying the company as a place
to kickstart a career.
In 2023, we had 27 graduates in our
global Graduate programme in Denmark,which presents young professionals with
opportunities across our entire global organisation.

Flexibility is key

We want to be a flexible workplace. Our
global position on workplace flexibility
guides the Demant Group to implement
concrete policies to ensure the flexibility ofworking partly from home, if the task andlocal conditions allow.

Enabling development is a central part ofhuman leadership. In Demant, people development is an ongoing process between
manager and employee as part of a manager’s responsi ility.

Employee turnover

The Demant Training Academy offers internal training within leadership, project
management, people development andprofessional skills.

The most apparent risk associated with
employee turnover for Demant is related to
our Hearing Care business.

When it comes to the frequency of people
leaving and joining the company, there are
varying trends within the markets that Demant’s business areas are present in.

Increasing levels of resignations and hirings are a trend within retail, where frontline personnel shuffle more frequently between receptionist and assistant types of
jobs.
2023
The combined voluntary and involuntary
turnover rate in 2023 was 23%, compared
to 26% in 2022. The number still reflects
significant variations across the organisation.
We see higher employee turnover ratewith waged workers (hourly rate) thanwith salaried workers (fixed monthly rate).
This is most apparent with employees at
our production sites and within retail in
Hearing Care. This year, the turnover rate
also reflects layoffs in our Communications
business area, EPOS, due to a decision togradually wind down activities in the
Gaming business, as communicated in August 2023.

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PeopleEngaged at work
When people feel engaged, they are happier, more innovative andproductive. People who thrive tend to enable others to thrive as well.
Ensuring a high level of engagement is key to maintaining a sustainablebusiness.
In Demant, we work with employee engagement through our global engagement
programme, Pulse, including a yearly survey. The survey results are discussed bymanagers and employees who work withareas requiring attention and actions in
the teams throughout the year.
We believe that an inclusive workplacecreates higher engagement. It is a key
dri er for e eryone’s a ility to perform welland thrive at work.

It also stresses that the strengthened
focus we have continously put on
engagement over the past years, is called
for. The engagement level has improved
overall, and we see good improvements inseveral areas, but we are not where wewant to be. The results indicate that we
can still do more to make all people at Demant feel included in their daily work andvalued for their unique talents and potential.

2021
2020

2023 results

We reached an engagement rate of 4.11
and a participation rate of 87%,
corresponding to more than 17,000
employees. Our engagement level is above
average with a small increase of +0.03,
compared to 2022.
The employee participation in Pulse
highlights engagement as a high-valued
priority and it outpaces the Gallup
Database median by 3 percentage points.
Though the result is below the ambitious
target of 4.27, we are pleased toexperience that people generally feel
happy and proud to be part of Demant.

2023

2022

2019

Engagement rate
Engagement rate
Engagement rate

Engagement rate

3.82

34th percentile

3.93

40th percentile

4.02

Engagement rate

4.11

4.08

52nd percentile

Targetof 4.15
not metTargetof 4.27
not met50th percentile

46th percentile

Gallup conducts the engagement survey, and we collect data in February each year. Our level of engagement is rated on a scalefrom 1-5. Percentile rank is used as a enchmar to determine how a team’s results compare to those in Gallup’s extensive database. The 52nd percentile indicates that 50% of teams scored lower than Demant on the engagement rate.
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PeopleInclusivity and teamwork
As part of engagement, we measure inclusivity and equity. We are happy to see that
employees predominantly perceive Demant as a place where everyone is treatedfairly.

Risks and opportunities

In 2023, we saw a slight increase in our inclusivity index score providing a result of
4.26 (+0.04) and 57th percentile. On average, employees feel respected, valued fortheir strengths, and have trust in Demant
as a company that acts with integrity andresponsibility.

e continue to in est in leaders’ s ills todrive engagement and a culture of inclusion and offer support for the teams thatare challenged, while respecting the paceat which it is possible to introduce changes
and build up engagement in a growing organisation.

A low level of engagement can impact Demant’s a ility to attract and retain talent,and it is a clear focal point for us to mobilise an engaged workforce, for the good of
our employees as well as the business.

Our peer-to-peer relationships are above
average and stronger than ever, meaningthat Demant’s strong alues of teamwor
and mutual respect are also clearly reflected in the results.

2023 activities

We have focused on the importance of individual development, driven by managers,which has had a positive impact. As a result, more people feel that they are getting
constructive feedback and experienceroom to learn and grow in their job.
However, the biggest potential still lies
within managers’ a ility to pro ide regularfeedback and recognition on work andsupporting employee development.
We will continue to focus strongly on thisand enhance the way we pay attention toand support each other in the teams –both as managers and as colleagues.

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PeopleEmbrace diversity
It is a fundamental right to be who you are, also at work, and we want toconvey a work environment built on care and respect for others,
characterised by diversity and inclusion.
To har est the true potential of Demant’s
diverse culture, we continue to grow ourunderstanding of the concepts of inclusionand equity especially.
The aim is to address potential unconscious biases and sameness thinking andmitigate risks related to insufficient or misunderstood work with diversity, equity andinclusion (DE&I), as well as to support theengagement of employees who may otherwise refrain from sharing their opinions,
ideas and solutions.

Our approach
In Demant, the concepts of DE&I are an indisputable priority. Working with DE&I
boosts performance, improves our leadership and innovation skills, maintains highcustomer satisfaction and supports our efforts to attract and retain talented minds.

Our approach is focused and guided by a
DE&I policy introduced in 2022 with targets for 2025 for top-level management,
including Executive Board, which also includes several key short-term activities tosteer progress.

Age, gender, education
and background of themembers of Board of
Directors and Executive
Board are listed in the
Annual Report 2023.

Demant is present in all parts of the worldand employs people with different ethnic
backgrounds, personalities, nationalities,
ages, genders, sexual orientations andlevel of education. We encourage respectfor diversity, and we strive to treat all employees fairly.

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PeopleDiversity targets

We work with two diversity targets todrive the implementation and impact of
our DE&I policy.

Gender diversity in global top-level management**

Gender diversity in global
top-level management
We have improved the balance towards
reaching this target during 2023, fuelledby stronger awareness and ability to balance the diversity at this level.
Gender diversity in global
top-level management teams
We are excited to see that in 2023 wehave reached our 2025 target of having
75% teams on target. In fact, we have exceeded it. This is a testament to the dialogue and the clear, internal focus areas
we have maintained throughout the year.
The progress has also been driven by dedicating opportunities to make changes atthis level of management to secure a morebalanced gender diversity.
Now, we aim to maintain this level towards 2025, while we assess where to direct our efforts and potentially set new
targets going forward.
Board of Directors
With its own target, the Board of Directors
aims to have at least 40% of the underrepresented gender amongst shareholder-elected members, as this constitutes an even distribution in terms of gender. As of now, we are on target. When including employee representatives, the distribution is 50% women and 50% men.

*Managers in scope: 25 women and 84 men **Managers in scope: 29 women and 80 men

Gender diversity in global top-level management teams
January 2022

December 2022

December 2023

N: 79 teams

N: 95 teams

N: 97 teams

Within the target ofmax. ¾ of the same gender on a teamNot on target ofmax. ¾ of the same gender on a team

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PeopleInclusion is key
Through the concept of inclusive leadership, we continue the focus on
DE&I in our recruitment, performance and development process, as wellas DE&I training of managers.

Inclusive recruitment
Inclusive communication attracts more diverse candidates and helps build an inclusive culture. As part of the recruitment forhead office-based positions, we screen all
job ads using a tool to ensure inclusive
language-use.
We have embedded materials designed toprompt inclusive recruitment behaviour in
the Demant global recruitment platform.

Employee resource groups

The formation of employee resourcegroups (ERG) among employees is a way
for our workplaces to become more inclusive. Formed in 2023, we see that the
ERGs in Demant attract more members
and grow a focused agenda for their workwith relevant DE&I topics, such as (In)Visible (Dis)Abilities.

The groups and their resources are meant
to support and build strong and important
communities within our organisation.

To ensure endorsement, each group receives top management support and involvement.

They are employee-led and are formed
based on specific traits that group members possess or want to support or work toenhance.

We will continue to strengthen the structure, format, and collaboration around
ERGs in Demant.

Inclusive leadership
We have expanded training in unconscious bias and inclusive leadership behaviours and developed the capabilities
among HR leaders to drive DE&I-related
topics and training locally.
To support this, DE&I-specific themes of
relevance for our employee performancedialogue have been integrated in the
global process for performance dialogue
from the beginning of 2023.
A key topic for 2024 is to ensure easy access and availability to DE&I knowledge
and skills, building learning opportunities
for local use and adaption for all.

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PeopleA safe place to work
Health and safety management is anchored locally at our sites, where appropriate training is carried out depending on
the specific employee group.
While accidents can potentially happen
everywhere, including in office spaces,
there is often a higher risk of getting more
seriously harmed at, for instance, production sites.
Producing hearing aids and diagnostic
equipment does not entail exposure tohazardous situations or dangerous materials and chemicals, and this type of manufacturing is not classified as unsafe or
risky. Some tasks at Demant can entail operating larger vehicles or trucks, for instance in storage facilities. However, theincidents that primarily occur in our production are categorised as minor, such as
cutting or squeezing a finger.

Mental health

We understand there is a potential negative impact on mental health related towork, and we do what we can to prevent
stress at work. Aspects of working withstress management vary from place toplace, including cultural considerations
and legal regulations. Consequently, stressis managed on a local scale with HR departments across the Demant Group. The
overall responsibility lies with HR management in tight collaboration with relevant
managers.

See overview of accidents in production on
page 65.

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PeopleA story from Demant(In)Visible (Dis)Abilities
To boost inclusivity, we launched an initiative to create employee
resource groups (ERG). In 2023, five groups were formed, one of themfocusing on visible and hidden disabilities in the workplace.
The ERG (In)Visible (Dis)Abilities was bornout of an understanding that disabilities
come in various forms - some are visible,
and others are not as apparent.
The
G’s vision is clear: to ensure thatboth current and future employees feelthey have a safe workplace where they
can be their true self.

It all starts with awarenessIn Demant, we want to foster an environment that is open to the employment ofpeople with both visible and hidden disabilities, and awareness is key to opening
the conversation on inclusivity.
So far, with a joined effort from all groupmembers, the (In)Visible (Dis)Abilities ERG
has managed to push for more awarenessin 2023.
Among others, it facilitated for Demant tojoin Hidden Disabilities Sunflower (Solsikken) to help raise awareness andgreater understanding and inclusion ofpeople with hidden disabilities.

The ERG also invited colleagues at headquarters in Denmark for a talk about
ADHD and autism and how employees
and employers can play to the strengths ofneurodivergence, as well as they ran acampaign to spark conversation about
dyslexia.

Talking about stigma
Stigma is a part of working with hearing
healthcare and hearing solutions. It istherefore clear-cut for Demant to address
the stigma that can come with different
disabilities, as well as to increase awareness of this in our own workplaces.

It all starts with awareness. It is difficult to workwith a disability that you
do not know exists– Rikke Nielsen, Commercial
Director and part of the ERG Lead

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PeopleCaring for climate
On-site solar panels
Demant South Africa

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Climate impact
aring for people’s health and well-being goes hand in hand with caring
for the environment.
In 2023, Demant’s emission reduction tar
gets were approved by the Science Based
Targets initiative and deemed consistent
with the intent of the Paris Agreement tolimit global temperature rise to 1.5°C
above pre-industrial levels.
The Group commits to reducing absolute
scope 1 and 2 greenhouse gas emissions
by 46% and scope 3 emissions by 46% by2030 from a 2019 base year and to reaching net zero emissions across the value
chain by 2050.
As a group in constant growth, both organically and through acquisitions, decoupling our emissions and environmental impact from that growth is key to meeting
our targets (SDG13).

On an everyday basis, the Demant Group
Code of Conduct guides our practices
within energy, resource and waste management by laying out our principles forenvironmental responsibility and reduced
climate impact. We work both with the environmental optimisation of our operationand our products (SDG 12).

Climate and environmental risks are likely
to materialise for any company in the future as the planet continues to be underheavy pressure, and resource scarcity becomes a greater and greater issue. To that
end, Demant continuously explores opportunities to transition to renewable energy,
reduce its resource consumption, increase
its use of recycled materials, and takesother measures to lower scope 3 emissions.

Baseline recalculation
In 2022 and 2023, the Group grewsignificantly enough through acquisitions
to adjust our baseline following ouremissions baseline recalculation policy. In
2023, we adjusted our baseline and thefollowing reported years to account for the
new acquisitions.

Environmental and climate risks
In 2023, we conducted an environmental
analysis assessing our exposure to climate
and environmental risks. We have not yet
identified any material risks to our company from climate change due to the location of our operations and key suppliers.

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Caring for climate

EnergyWhile Demant’s electricity consumption was relative decoupled from theGroup’s growth, we saw an increase in our total energy consumption in
2023.
Compared to 2022, Demant increased our
total energy consumption 6% from108,163 MWh in 2022 to 114,227 MWh in
2023. 75% of the increase in total energy
consumption was driven by an increase ingasoline and diesel and the remaining
25% by heating sources.
While the business grew, many of our energy intensive entities were able to lower
their electricity consumption. On Grouple el, Demant’s total electricity consumption decreased 1%.

Renewable electricity

Shifting to renewable electricity is key to –our transition. In 2023, we increased investments in on-site solar generation forseveral sites. With the self-generated solar
energy and new supplier contracts forgreen electricity (green tariffs) 21% of the
Demant Group’s electricity consumption is
now covered by renewable electricity.
Working towards our goal of 50% renewable electricity in 2025, Demant plans toinvest in certificates in 2024, while exploring more long-term options.

21%

renewable
electricity of
total electricity
consumption

10%

renewableenergy of
total energy
consumption

Electricity consumption (MWh)772 148

5,856

53,267

51,776

51,421

15,792
15,792

16,910Total Group
consumptionin MWh114,227

23,32851,421
Electricity
Fleet - gasoline (fuel)Natural gas
Fleet – diesel (fuel)District heating
Coal
Liquefied petroleum gas (LPG)
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Caring for climate

Emissions
We decreased our scope 1 and 2 CO2e emissions 15% from 2022
to 2023.
Driven by our transition to renewable electricity, and despite our slight increase in
consumption of certain energy sources, theGroup managed to decrease its scope 1
and 2 emissions by 15% in 2023 compared to 2022. Although we still see aslight increase (7%) in our emissions compared to our 2019 baseline, we are on theright track towards our goal of reducing
scope 1 and 2 emissions 46% by 2030.

Scope 1 and 2 emissions (tonnes CO2e)
Total
35,862

Looking at our emissions per energy
source (page 32), electricity continues tobe key for our transition and progress towards our scope 1 and 2 emission target.
The emissions from our fleet is another focus point for the Group. In 2023, we initiated a deeper analysis of our fleet to formulate a Group strategy for fleet electrification and lower our scope 1 emissions.

Total
28,433

Total
31,721
Total
27,33524,801

18,8392023
scope 1 & 2
Scope 1emissions40%(30,469 tonnes
CO2e)

Scope 2
60%

9,594

Total
30,46919,943
7,391

24,175

11,061

18,153
12,316

7,546

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Caring for climate

1%

1%

3%

2%

10%

17%
2023
scope 1 & 2
emissions share
per business
area

2023
scope 1 & 2
emissions shareper energy
source

12%
46%

1%

17%

35%
Hearing Care
Hearing Aids
Diagnostics
Communications

56%
Electricity
Fleet - gasoline
Fleet - diesel
Natural gas
District heating
Coal
Liquefied petroleumgas (LPG) 0%

Scope 3
While our progress in terms of reducing ourscope 1 and 2 emissions is clear, it is taking
us longer for our reported numbers to reflect
our actions towards our scope 3 targets.
We continue to report scope 3 emissions
based on our 2019 baseline adjusted forrevenue growth while we are working to
improve our data and approach to scope 3
reporting across the Group.
In 2023, we increased our engagement with
our suppliers as the purchased good andservices category continues to be both crucial for scope 3 emissions reductions as well
as challenging to tackle. Our suppliers’ transition to renewable electricity is key to lowering Demant’s scope 3 emissions. We continue to be committed to our targets and ourpledge to do our part to fight climate change.

Scope 3 emissions
Year

2019

2020

2021

2022

2023

TonnesCO2e524,667*

514,053**

657,639**

691,434**

793,306***Estimate: 2019 spend based materiality assessment**Estimate: 2019 spend based materiality assessment adjusted for revenue growth in local currency

Scope 3 categories in percentages
Purchased good and services

77.6%

Transportation

10.2%

Employee commuting

6.9%

Use of sold products

2.6%

Fuel and energy related services

1.1%

Waste in operations

1.0%

Business travel

0.5%

End of life treatment

0.1%

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Caring for climate

Committed tohigh ethics
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Committed to high ethics

Ethics and governance
Ethical behaviour and strong governance processes are undeniable
aspects of running a sustainable business and fundamental fora global society to achieve sustainable development.
Demant’s anti-bribery and anti-corruption
activities represent our primary contribution to peace, justice and strong institutions (SDG 16). Our business ethics programme reflects Demant’s commitment toa high level of business ethics and lays thefoundation for our larger sustainability
agenda.

Corporate governanceWorking diligently with quality and ensuring a responsible supply chain is vital for
us to sustain the high standards and reliability of our products, ensure the safety of
our customers and users and uphold ourusiness’ integrity. In the section Businessareas (pages 40-57), we report individually on quality and safety as well as how
we work with suppliers and manufacturers
in relevant business areas. Descriptions of
how we work with scientific claims management can be found at our website here.

In the section ‘ris management acti ities’on pages 46-49 in our Annual Report
2023, we review the most material risks
identified.

Leading a responsible business involves
balancing various stakeholder interests.
Read more about how we govern Demant,
including our internal control and risk management systems, in our Corporate Governance Report, Remuneration Report andpolicy.

To be replaced
With better quality image

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Committed to high ethics

Business ethics programme
As reflected in a global business ethics programme, we strive for highethical standards and perform business with integrity and honesty. Our
code of conduct and third party compliance code set the minimum
standards and ethical principles applicable to all employees and third
parties with whom Demant does business.
The business ethics programme covers acode of conduct, a global whistleblower
system as well as a portfolio of global programmes (such as anti-corruption, competition and trade compliance) with relevant
policies and guidelines, processes, tools,
risk assessments, training and advice
within business ethics.
Business ethics is governed by a Group Legal Board. The Group Legal and Compliance team is supported by a network of 62
business ethics champions locally and ingroup business functions.
Find an overview of all publicly available
policies here and read more about how wework within our business ethics programme on the following pages.
Demant is committed to internationallyrecognised human rights standards andrelevant laws and regulations aimed at
protecting and promoting human rights
globally and at work. This includes theModern Slavery Acts of the United Kingdom and Australia, and statements can befound on the relevant company websites.

We have not identified any humanrights violations in 2023.
We strive to meet local human rights
standards wherever we operate. Should
national legislation and international human rights principles conflict, we adhere to
the higher standard. We consider risks ofadverse impact on human rights to exist incertain parts of our supply chain We reporton the risks to our own employees in the
People section.

Business partner relations

When dealing with third parties, we use
our third party compliance code, whichreflects the behaviour that we as a Group
expect from third parties. We use our buying power responsibly and consider our
suppliers as true partners in the value wecreate. Given their differences, Hearing
Aids, Diagnostics and Communications report individually on how they work to ensure a responsible supply chain living up to
Demant’s standards.

Anti-corruption

We actively work to eliminate corruption in
our value chain and oppose corruption
wherever we do business. It is part of our
fundamental principles to compete forbusiness on fair terms and solely on the
merits of our services. Our anti-corruption
policy applies to all employees and includes rules and guidance on behaviour
particularly for exposed employee groups.
In addition, individual appendices for eachbusiness area provide scenarios and examples in grey zone matters relevant tothe business.

Our process includes collecting information
via questionnaires and required commitment by distributors to the third party
compliance code. In some instances, we
perform more in-depth due diligencebased on the level of risk.

We performed 57 due diligences towards high-risk distributors in 2023,
adding to a total of 197 due diligences. We will expand the scope fordue diligences in 2024.

The most significant risk is related to doing
business in, and collaborating with, third
parties from countries where corruption ishigh. As a global business, we also operate in countries where laws on anti-corruption are flawed, not followed or not enforced. Demant’s policy shall always beapplicable to govern employee behaviour
regardless of local regulations and enforcement.
Distributor due diligences
As part of our anti-corruption programme,
we have implemented a risk-based process for due diligence of business partners.
We perform due diligence of high-risk distributors, such as distributors who operate
in countries where risk of corruption ishigher. We base our scope for evaluationof risk on the Transparency International
Corruption Index.
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Committed to high ethics

Trade compliance

We have a sanctions screening process inplace and perform sanctions checks for
distributors and other high-risk third parties engaging in business in countries subject to sanctions, by EU and the US.
In 2023, we carried out sanctions checksof 12 distributors and other high-risk
partners.

Since the Russian invasion of Ukraine inlate February 2022, Demant has halted all
trade activities in Russia and also Belarus
to ensure our compliance with the sanctions towards the regions imposed byamong others the EU and the US.

Interaction with healthcare
professionals

Maintaining appropriate interaction withhealthcare professionals (HCPs) is fundamental to an ethical company like Demant.
In several of our business areas, we interact with HCPs on a regular basis in different contexts.

Competition law

In 2023 we launched a group-wide competition law policy, including a US-specificpolicy, for a targeted group of employees.
60% of the targeted group has confirmed, read and understood the Group
policy. Training of target group has been
conducted.

We make sure we do not pay above fairmarket value for their services and that weare transparent about our collaborations.
This process is guided by local policies aswell as country-specific regulations.

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Committed to high ethics

Whistleblower system
Our global whistleblower hotline and policy enable employees, business
partners and other stakeholders to report their concerns about serious
and sensitive actions in a confidential and anonymous manner.
The Demant Group whistleblower scheme
consists of a whistleblower policy, a hotline and guidelines for investigation.
Should any employee or business partner
encounter serious, sensitive or improper
behaviour that fails to comply with policies
and requirements of our business ethics
programme or applicable laws, our whistleblower hotline provides a secure andconfidential platform to inform about concerns without retaliation if provided ingood faith.
The whistleblower hotline is available inmultiple languages, reflecting the diversityof the Group and local regulations. It isavailable on our website, on various internal platforms and via the Demant Business Ethics App.

Governance

The hotline is operated by an external systems provider and Group Legal and Compliance reports all whistleblower cases to
Demant’s Audit Committee on a regularbasis. Governance regarding potential reports on our top management is regulated
in our Demant Group Management Protocol.

Reports

The reports filed in 2023 covered a broad
range of the subjects in scope for the hotline. Primarily, reports were related to HR
matters, workplace environment (harassment and discrimination), fraud and othermatters. The hotline is updated to comply
with the relevant EU regulations.
In 2023, 90 reports were filed through thewhistleblower system.
In Spring 2023, as a result of an investigation initiated by a whistleblower case, theformer President of the Diagnostics business area as well as two leading employees in a subsidiary left their positions in
Demant. The investigation uncovered thatthey had not sufficiently ensured a healthy
work culture in parts of the business area.

Investigations

Incoming reports are managed by Group
Legal and Compliance who perform timely
investigations. We deploy a template forwhistleblower investigation reports, follow
various processes and support any action
following a reported case according to ourguidelines for investigation. As part of this,we ensure that any report filed is treatedcautiously and genuinely, while making
sure that we protect whistleblowers from
reprisals and retaliation by safeguarding
their privacy and anonymity.

Awareness and trust

For the whistleblower system to work as
intended, it is crucial that all employees
are aware of our hotline, how to report
and the level to which they are protected if
doing so.

We will launch group-wide e-learning on
our code of conduct and whistleblower
hotline in 2024.

We want to build trust in our system. This
includes increasing awareness and conducting training to ensure implementationof our whistleblower scheme.
Implementation and training
We have implemented new regulations in
our whistleblower policy and in ourthird party compliance code, e.g. EU
requirements.
In 2023, we reached 50% of our total
workforce with various levels of implementation efforts, face-to-face or online
training.
It is part of our responsibility to ensure that
Demant’s employees are familiar with ourwhistleblower hotline and understand thepolicies and guidelines in our programme.
We have focused on internal communication about the hotline to continuously ensure implementation across our group. Our
efforts are reflected in the increased number of reports in 2023.

Whistleblower reports
2021

48

2022

47

2023

90

We ma e use of ‘read and understandtools,’ face-to-face training and quizzes tosupport this work. In terms of number of
employees, Demant has grown significantly over the past few years.
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Data and IT
Demant is entrusted with personal data and committed to protecting
this. We ensure a high level of IT security, stay on track with trends in the
cyber landscape and continuously update our control mechanisms toprevent threats related to IT and data.

Data

Demant handles personal data on our employees, customers, users and business
partners, and we are committed to protecting such personal data through highlevel security measures and responsible
policies.
In 2023, we have continued our efforts tostrengthen our data privacy framework.
We have been focused on improving ourdocumentation and transparency both in
EU countries and, particularly, in Switzerland, where new data privacy legislation
has entered into force in September
2023.
As our industry and products increasingly
become more digital, the internal demandfor privacy support grows. At the sametime legislation is becoming increasingly
complex and requires continuous monitoring. For instance, we see a growth in newproposed regulations to address artificial
intelligence. We strive to make sure thatour business is provided with the best possible guidance to address the current andnew requirements, while ensuring that ourinternal procedures help facilitate this continuous work.

We continue to experience increasing interest in privacy matters from our customers, users and employees and spend significant resources to ensure that any privacy queries are addressed. In Europe wecontinuously see an increase in actual
data subject requests i.e., people exercising their rights in accordance with GDPR.
We cooperate with the authorities when
the situation requires.
We encourage everyone in Demant subjected to GDPR to get acquainted withnecessary regulations and good practice.
In 2023, 6,700 employees engaged insuch activities through our global training platform Fuse.
Data ethics
We have a global data ethics policy, and it
is mandatory for management and employees to comply with the policy. The policy covers all processing of data, including
personal and non-personal, and goes beyond compliance as we already work diligently to ensure the processing of personal
data is done in accordance with regulatory
frameworks.

The policy provides additional protections
for the benefit of our customers, users andemployees, and it is aligned with Demant’s
existing core values.

IT security

IT medical device compliance is our license
to operate, and we keep an eye on and follow regulatory requirements.
In 2024, we aim to obtain ISO/IEC 27001
and retain AICPA SOC2 certifications tocomply with customer requirements on
information security, cybersecurity, andprivacy protection.
Our IT setup supports daily business activities across the world, focussing on automation, streamlining, monitoring, testing
and training. All employees receive security awareness training with tests monthlyor quarterly.
Among others, IT functions support comprehensive documentation, sales, logistics
management and knowledge-sharing infrastructure, and we consider it a central
part of our usiness’ resilience.

Our global security improvement programme Armstrong refers directly to theoard of Directors’ IT ecurity ommittee,
using the NIST Cyber Security Framework
for industry benchmarking.
It is mandatory for all Demant employees
to familiarise themselves with our IT security policy, which is internally available toall, and to follow guidelines for how tohandle company IT equipment. We regularly update the policy to accurately reflect
our business and needs.
In 2023, approximately 3,000 employees
took part in IT security and awarenesstraining through our global training platform Fuse.
This year, we focused our efforts on ensuring faster business recovery capabilities
and raise the business protection bar of
our infrastructures, both internally and externally. We will extend this work in 2024,with a focus on raising the protection ofbusiness applications supporting our customers’ sales and production.

To uphold solid IT security and the IT
mechanism needed to support this, wehave several initiatives in place to mitigate
risks associated with IT security. This includes preparing Demant for a future inwhich cyber threats are imminent, and we
ensure a strong, robust and updated IT infrastructure.
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Data and IT

Business areas
DemantSustainability
SustainabilityReport
Report2023
2023
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Hearing Aids

Hearing Aids

Core SDG impact
Based on the estimated lifetime ofhearing aids and fittings made by
the Group in 2023, we facilitated
13.3 million years of improved
quality of life in 2023.

Key 2023 sustainability result
New handles for hearing aid filters
made from 52% less material withno residue plastic, as well as connectivity packaging emitting 78%
less CO2e.

Oticon IntentTM

DemantDemant Sustainability
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Report 2023
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Hearing Aids

BrainHearing™
We constantly work to deepen our knowledge of the relationshipetween the rain and hearing through Oticon’s concept ofBrainHearing™, and this year was no exception.

Impact on veterans

To no one’s surprise, eterans often sufferfrom post-traumatic stress disorder(PTSD). Such a condition can make veterans more sensitive to sound in general andespecially loud and sudden sounds. A
Danish study showed that SuddenSoundStabilizer (SSS) in Oticon hearing aids reduces sudden sounds and brain responses
to these sounds.

We can use this knowledge to design better interventions, clinically and technologically, to facilitate novel word learning
among children with hearing loss.

New BrainHearing network

Findings of recent studies indicate that wecan predict the learning outcome by how
much effort one puts into learning.

Oticon kicked off a new BrainHearing initiative, connecting recognised science profiles with the community of hearing care
professionals.

It is not that children with hearing loss will
have a harder time learning, it is that they
overall will learn less because they cannot
detect novel words or non-words as well.

To improve our access to post-market
data and advance our outside-in learnings
from users, we established a new clinicalpartnership with Henry Ford Health - a big
cluster of hearing clinics, which serves
multiple sites in the US.

Another paediatric study, taking place inthe US, showed improved performance inword recognition, non-word detection andword-recall in noise, when using Oticonfeatures.

Hearing loss among children

Learning a novel word requires recognising that the word is new and associating
the sequence of sounds in the novel wordwith its meaning. Distortion in sound,caused by noise or a hearing loss, affects
how precisely each sound in a word is perceived, leading to confusion, making it
harder for the brain to process the sound.
Consequently, for children with hearing
loss, detecting a novel word can be challenging.

Better access to clinical data

This strengthens Oticon’s thought leader
position and enables more wide diffusionof the Group’s no el rain earing™ insights among relevant communities. The
network offers a series of inspiring webinars and panel discussions on relevant
topics in audiology and cognitive hearing
science, a unique forum to share and leverage experiences and a source of scientific material to continue the knowledgesharing.
The first webinar drew in more than 1,400
engaged participants, and the feedback
from participants were vastly positive.

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Hearing
Hearing Aids
Aids

Enhancing end-user benefits
At Eriksholm Research Centre, which is part of Oticon, researchers makeaudiological discoveries with the potential to significantly enhance enduser benefits in the future of hearing care.
Eriksholm Research Centre (Eriksholm) is
the largest scientific research facility in the
hearing aid industry.

Eriksholm has developed a deep understanding of the real-life implications ofhearing loss and continues to leveragethat each year. This happens in continuous
dialogue with a large number of people living with hearing loss and dedicated hearing care professionals, as well as strong
academic partnerships,

The perspective of peopleusing hearing aids

In hearing rehabilitation, we have several means of identifying challenging
listening situations. However, we do
not know the details (sound and noiselevel) of when a specific situation isexperienced as challenging.
A new study AUPE, seeks to overcome that by having hearing aid users
report the challenges directly via a
prototype mobile app that automatically logs data from the hearing aid.
Read more about the study: Audiological User Pain Points - Eriksholm

Noise at the workplace

We know that disturbing noise is the most frequent workplace complaint. On one hand, noise
leads to stress and fatigue, which are further linked to increased sick leave, early retirement
and productivity loss. On the other, communication enables interaction and participation,
which is crucial for health and well-being.
From 2024, Eriksholm will participate in the 5-year EU-funded project EASYLI with many international partners. The goal is to examine this balance and optimise the ratio between
costs and benefits of effortful listening in work situations.
The learnings can help detect fatigue early on and prevent the negative effects of high listening effort. Individualised interventions can improve the listening value, thus reducing the negative effects and socioeconomic burden of listening that requires a lot of effort.
Learn more here.

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Hearing Aids

Rethink, reuse and replace
To improve the way, we manage and consider waste and material-use,
we continue to bring forward new practices to introduce moresustainability in Hearing Aids packaging and production.

Improved filter handle
Building on previous experience, we haveredesigned and optimised the ProWax
miniFit handle for Hearing Aids.

The new handles are made from
52% less material. There is no
residue plastic, which results in a
total material reduction of 61%.
Additionally, the new handles will be madeentirely from granulated plastic scraps
from production of other hearing aid parts,
such as filters. This makes a significant
overall material reduction.
In improvements like this, we benefit fromcore know-how from similar optimisation
efforts, which has previously led to substantial material reductions.

Packaging
For all packaging developed in 2023 andgoing forward, we have focused on minimising material use and volume, using
mono materials and avoiding single-use
plastic

Connectivity packaging
Following these focus areas, we have optimised our connectivity packaging.

The new packaging will be produced with 78% less CO2e, 12%less volume and 40% less weight.
Among other things, we have replaced
single-use plastic with simple paper or biodegradable pulp inlays and replaced coloured paper with FSC-certified paper. We
also reduced volume by 12% and almost
40% in weight.
Charger and speaker units
By similar means of optimisation, CO2efrom our new packaging solution for the
new charger is reduced by 43%. As well as
we have reduced the actual packaging
size of our miniFit Detect speaker units by
54.8%.
To guide users to recycle packaging where
possible, we have introduced a recyclingstatement and symbol on all relevant
packaging:

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Hearing Aids

Working with suppliers and ensuring quality
Suppliers

In Hearing Aids, we collaborate with direct
and indirect suppliers who match ourroadmap in terms of commercial, technicaland quality-related requirements. We
monitor and address global supply risks
such as sustainability risks.
We engage suppliers that are linked to
manufacturing but also indirectly to thegoods and services that enable our operations. The direct suppliers we collaborate
with to manufacture and distribute hearing
aids are manufacturers of electromechanics, electronics, mechanics, production consumables and material supporting packaging and marketing activities.
New direct suppliers sign our Third party
compliance code as part of their approval
process.
During 2023, we have approved andsigned 14 new direct suppliers under the
Demant third party compliance code.
All 397 approved direct suppliers delivering into our production and distribution
have signed our code.
Risk assessment
We have a process in place through which
we risk assess our direct suppliers basedon their ability and willingness to comply
with our code. In doing so, we consider
business sector and certified management

systems as well as a geographical risk assessment based on international standards, which considers bribery, economy,
unemployment, human rights and othermaterial risks.
When considering a potential partner, we
assess the level to which the supplier cane mo ilised in Demant’s sustaina ility
agenda to ensure that we create the mostimpact.
Following procedure, we have risk-assessed all 14 new suppliers prior to approval in 2023.
Pre-risk assessments are conducted whenor if we identify the need.
Sustainability supplier audits
In 2023, we conducted two sustainability
audits, which were related to packaging
materials in China.
In China, the auditor TÜV SÜD found a
total of 12 non-compliances: 4 critical, 3major and 16 minor, all of which havebeen corrected according to the corrective action advised.
Engaging suppliers in decarbonisation
Towards the end of 2023, we initiated engagement with our most important suppliers that are fundamental for achieving Demant’s o erall decar onization targets.

The aim is to improve our carbon accounting and gain a better understanding of
where we are against our targets, as wellas to make the key suppliers a part of ourdecarbonisation journey. In the beginningof 2024, we will launch our Supplier engagement programme to formalise the engagement and continue to collaborate
with our suppliers both in our decarbonisation and our sustainability transformation
journey.

and ISO 13485 audit found 1 non-conformity which is a minor finding. The minor finding will be closed according toprotocol before the next audit.

Quality and safety•

We follow our Hearing Aids quality policy,
which can be found on our website, to ensure the safety and quality of our solutions.
It covers activities supporting development, manufacturing, marketing and servicing in our business area, as well as defining and describing specific managerial
responsibilities.
2023
When audited, we target zero major findings. In 2023, we had an MDD (Medical
Device Directive) audit and our notified
body TÜV SÜD completed the re-certification audit against MDSAP and ISO 13485,
and the surveillance audit for Medical Device Regulation (MDR).
The result of the MDD audit was 6 minor
and 1 major non-conformities. All areclosed according to protocol. The MDSAPWe closed non-conformities from 2022,
and new findings will be handled according to our quality policy.
Quality targets
We work with several quality targets, including, but not limited to:•••

Product quality: 3 months complaints
vs. 3 months sales should not exceed
an agreed percentage. Target
achieved since January 2023.
Production quality: agreed onmonthly process quality control (PQC)
percentage. Target achieved since
January 2023.
Safety: no vigilance cases (no Medical
Device reporting). Target achieved.
QMS: Internal audit fulfilment vs. plan.
Target achieved.

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Hearing Care

Hearing Care

Core SDG impact
We offer people over 60
years free yearly hearing
assessments and increased
this by 5% this year.

Key 2023 sustainability result
As part of the global
Campaign for Better
Hearing, we donated 466
hearing aids.
AudikaLove your ears campaign

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Hearing Care

Love your ears – we do
ery day, our hearing care professionals realise Demant’s purpose ofproviding life-changing hearing health and connect face-to-face withhearing aids users to provide personalised support and care.
Your hearing is central to your social life,
self-expression, confidence, and ultimately,
your health. Hearing helps people live a fulllife and connects us with the world aroundus.
Our Hearing Care business, Audika Group,
is a global network of more than 3,500
clinics in 20+ countries, where hearing
care professionals perform excellent
customer service that caters to diverse
customer needs.

No ear is the same

Personalised care from hearing careexperts is essential to better hearing
health. Because, hearing is as unique as
fingerprints, and treating a hearing loss
takes more than a one-size fits all solution.

Test your ears at 60 years

The first step to taking care of your ears is
to get them tested. Through our clinics, weoffer free yearly hearing assessments topeople over 60 years of age.

Helping the world hear better
ince 2018, Demant’s earing are usi
ness has run a global initiative to get hearing healthcare on the agenda.
Through the International Campaign for
etter earing, many of Audi a Group’s
Hearing Care clinics engage locally anddonate free hearing aids to people withhearing loss.
We want to inform people about the advantages of hearing health care and theconsequences of untreated hearing loss.
Early hearing screenings are important,
and we provide free hearing screenings toeveryone over the age of 60 years to hopefully increase our reach.
Through our give-back programme, we
make hearing aids accessible to people
who otherwise cannot afford them.

Since 2018,
How it works

Every time someone gets their
hearing assessed in a clinic enrolled in the Campaign for Better
Hearing, the clinic donates a specific amount of money to thecampaign.
Donations are allocated to provide free hearing aids to people
who need hearing aids but have
low purchasing power. Recipients are then picked based on local nominations from the clinics.

Almost

DKK 28 million raised

1.3 million screenings & tests

1,752 people helped

To increase our reach, we aim to increase
the number of free assessments by atleast 5% each year, which we alsoachieved in 2023.

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Hearing Care

Increasing awareness in China
Our retail business in China, Sheng Wang Hearing, visited a hospital anda school in the city of Yushu to donate hearing aids and increaseawareness of hearing healthcare. The event was part of a bigger effort
to promote the de elopment of hina’s hearing healthcare market.
Sheng Wang Hearing has joined forces
with the Audiology Development
Foundation of China (ADFC), to launch theSheng Wang Ear-Care Welfare Plan. The
aim is to spread awareness andknowledge about hearing healthcare andhelp people who experience difficulties
with their hearing in China.
Sheng Wang Hearing joined the DemantGroup in 2022.
In April 2023, Sheng Wang Hearing
donated 520 hearing aids to the ADFC
under the name ‘ are for hearing health toenjoy life in the future’. A ceremony andvisits to Yushu hospital and the school
launched the donation.

Donating hearing aids in Yushu
In July, Sheng Wang Hearing volunteer
service team went to Yushu in theSouthern Qinghai province in China. In
Yushu, the volunteer team visited thePrefecture People's Hospital and theSpecial Education School to do hearing
tests and donate hearing aids to a little
more than 50 people with hearing loss.
During their visits, the volunteers
performed ear canal examinations, hearing
tests and trial fittings, and gave away
accessories such as batteries. As an
essential part of good hearing healthcare,
the team also shared their expertise on
how to wear and take care of the newhearing aids.

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Diagnostics

Diagnostics

Core SDG impact
Every year, our technology
helps screen and diagnose over
200 million people withsuspected hearing loss andscreen over 20 million newborns.

Key 2023 sustainability result

Interacoustics
VisualEyes™ 505

A new, qualitative, diagnostic
test will help people with hearing loss hear better in noisy environments, enabling them toengage in conversations.

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Diagnostics

Assessing is the first step
Our market-leading diagnostics products and solutions guideclinicians in decision-making on diagnosis and rehabilitation to
make a life-long impact on hearing health.
The first step towards alleviation isassessing a hearing loss.
According to the WHO (2021), earlyintervention is crucial to minimising theadverse impact of hearing loss on
language and cognitive development.

By providing solutions such as
audiometers, tympanometers,balance systems and otoacoustic
emission instruments, we are partof the daily job of audiologists andear-nose-throat specialists.

Every other hearing test in
the world is performed with
Demant instruments.

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Diagnostics
Diagnostics

Interacoustics Research Centre
Advancing audiology for 10 years, the Interacoustics Research Centre(IRU) works to change the lives of hearing care professionals and hearing
aid users alike.
The Interacoustics Research Unit (IRU) is
part of Interacoustics but located at theTechnical University of Denmark (DTU).

I U’s purpose is to impro e the uality oflife for people living with hearing problems.
Some projects contribute to that by investigating grand innovative ideas with thepotential to change clinical practice, whileother projects are more incremental in theirnature.

Improving hearing aid fittings in infants

A core theme for IRU is to improve validations of fittings in infants that are too
young for behavioural hearing testing.
In many countries, newborn babies are offered a hearing screening test, whichmeans that many hospitals and clinics are good at detecting hearing loss at an
early age. But when it comes to verifying that a hearing aid or cochlear implant is
actually working as intended, clinicians have had to wait until the child is around 9months old to be able to complete a behavioural test in which the child responds
to external sounds.

Better behavioural
testing in infants

It is important to detect hearing loss early
in infants and children to improve speech
and language development. However,testing hearing thresholds in small children
is difficult.
One popular method for testing involves
the child turning towards a reward when
they hear a sound. This method is vulnerable because the child may lose interest before the evaluation is completed. Anotherconcern is that clinicians subjectively decide whether the child reacted to thesound or not.
To address these concerns, IRU, Interacoustics, and Manchester University havecollaborated on a project funded by theWilliam Demant Foundation to remove
tester bias and improve the reliability ofthe decision about heard versus not heard
stimuli.
Read more about it here: BAMBINO project| The University of Manchester

In collaboration with the University of Manchester, IRU has developed a new, objective method which enables clinicians to verify that a hearing solution has been
fitted correctly in infants that are a mere three to seven months of age.
Read more here: Aided Cortical Auditory Evoked Potentials in Infants With Fr... :Ear and Hearing (lww.com)

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Diagnostics

Designing for more sustainability
As part of our ISO 14001 environmental certification, we have
implemented eco-design for the Diagnostics brand Interacoustics.
We look into how we can reduce and replace materials in our design process by:
•
•
•
•
•

Designing for long product life andhigh serviceability.
Reducing electricity consumption.
Increasing the number of sustainable
materials for products.
Reducing waste.
Investigating usage of recyclable
components.

In 2022, 48% of our plastic bags weremade from recycled materials. We aimedfor 85% in 2023 but did not meet that target.

We continue to use 100% FSC or recycled
cardboard are 100% recycled plastic packaging tape.

2023 results
We track our performance in packaging
materials at our main production:•

Reduce shipped printed materials
2022: 167 grammes per product2023: 56 grammes per product•

Reduce shipped plastic materials
2021: 19.5 bags per product2022: 23.6 bags per product2023: 23.7 bags per product

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Diagnostics

Diagnostics

Working with suppliers andensuring quality and safety
Suppliers

Purchasing covers the global Diagnostics
Group. By the end of 2023, after insourcing
and acquisitions, we are working with 530
direct suppliers. These represent various
manufacturers of electronics, mechanics,
plastics, packaging materials, marketing
material, and production material, as wellas indirect suppliers of service such as
freight. The number also covers suppliers
that manufacture units for resale, and final
consumables/accessories for audiology
and balance-testing.
Risk assessments
When we approve suppliers they must
pass the approval process according to
our ISO14001 document, which includes
environment and the Demant third party
compliance code. We assess within
specific supply and quality risk areas
which lead to the actual classificationof the supplier.
’Suppliers are categorised according totheir environmental impact, and we encourage them to work to reduce that impact. The suppliers make the largest partof our footprint, and we have a generic environmental protection agreement withmajor suppliers. We have detailed analysis
of carbon emissions of 23% of our key

purchased goods, which lies with six major
suppliers. In 2023, one of these suppliers
installed photovoltage to cover 17% of theelectricity used. The aim is to identify components of which we can reduce the carbon footprint by 50% by 2030.

Quality and safety
We follow our Diagnostics quality policy,
which can be found on our website, to ensure the safety and quality of our solutions.

The result of the audits was 10 non-conformities, one major and nine minor.
All have been closed according to the protocol ahead of the following audit.
If we get new findings, they will be reported as CAPA (corrective and preventive
action) and closed prior to the next audit.

•

Final inspection failure: monthly failures in final inspection vs. monthly total produced systems should not exceed an agreed percentage. Target
achieved.

•

Safety: One vigilance case reported in
the US. Field safety repair, corrective
and preventive actions have been
implemented.

•

QMS: Internal audit fulfilment versus
plan. Target achieved.

Quality targets
We work with several quality targets, including, but not limited to:•

Product quality: monthly complaints
vs. monthly sales should not exceed
an agreed percentage. Positive trendlines and performance slightly over astrengthened target in 2023.

It covers activities supporting development, manufacturing, marketing and servicing in our business area, as well as
managerial responsibility of quality in Diagnostics.
Ahead of any product entering the market,
the quality and safety is documented, andkey documents of the final product are reviewed and approved by management.
2023
When audited we target zero major
findings. In 2023, we had audit for ISO
13485, MDSAP and MDR (Medical Device
Directive).

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Communications
Communications

Communications

Core SDG impact
EPOS audio and video solutions help
prevent stress and listening fatigue, which
can be caused by imperfect audio experiences, and also help improve concentration,
the ability to focus for longer and overall performance.

Key 2023 sustainability results
EPOS initiated life cycle assessments of
selected products and EPOS headquarters inBallerup, Denmark obtained the ISO14001
certification.
Bulding on EPOS BrainAdapt™ technology, a
new scientific whitepaper from EPOS
indicates that noise attentuation can lead to
improved performance when performing twotasks at the same time.

EPOS
IMPACT 1000

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Communications

Reduced noise can improve performance
Building on the EPOS BrainAdapt™ technology, we continue to expand
our knowledge of how EPOS audio solutions can provide support for thebrain when processing sound, for instance in noisy work environments.
People often perform more than one task
at a time, without even realising it. In aprofessional context, one may need tolisten to a colleague speaking while
identifying information on a screen.
Performing one or more tasks requires
using cognitive capacity, which is a limitedcommodity. As an example, understanding
speech when there is poor audio and noise
requires more cognitive resources. As aconsequence, this may limit the amount ofcognitive resources that can be used toperform the other tasks.
Benefits of noise attenuation
In 2023, EPOS released a new scientificwhitepaper, investigating how noise
attentuation, or reduction, affects listening
effort, efficinecy and reaction time whenpeople perform dual tasks.

EPOS BrainAdapt
This type of in-depth scientific researchhas been a key element in the development of audio solutions built on EPOS
BrainAdapt™ technology, which supports
the rain’s natural way of processing
sound.

48%
BETTER
RECOGNITION OF
SPEECH-IN-NOISE*

The results indicate that noise attenuation
provides several benefits for people withnormal hearing, which can lead to
improved performance when performing
two tasks at the same time.

40%
INCREASE IN
EFFICIENCY**

23%
IMPROVEDREACTON TIME****As indicated by percentage of correctly repeated words.
**As reflected by the ratio between accuracy and reaction time for the correct responses.
***Up to 300 ms faster reaction to visual-cognitive task without loss of precision.

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Communications

Life cycle assessments
We are conducting life cycle assessments on selected EPOS products tomeasure each product’s footprint in terms of CO2e emissions.
In 2023, we set out to conduct cradle tograve life cycle assessments (LCA) on aselection of our product portfolio. With
help from external consultants, whilebuilding expertise in-house, we are making
timely progress. We expect to have thefirst analysis, verified by third-party, readyduring 2024.
Road to net zeroAs part of Demant, we are committed toreaching net zero emissions in 2050. The
life cycle assessments are one out of four
key projects initiated by EPOS to reduce
our scope 3 emissions.
The remaining focus will be to introduce
more sustainable packaging, move towards more green transportation, secure
more sustainable sourcing and product design and obtain relevant environmental
certifications. This year, our headquartersin Denmark were certified according to theISO14001 standard.

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EPOS

Managing quality and safety
The Integrated Management System (IMS)of EPOS ensures that we consistently meetuser needs and comply with local, regionaland global quality and environmental regulatory requirements, while obtaining relevant certifications to operate in specificmarkets.
In contrast to software, hardware can varyin production due to tolerances and humanerrors. We are attentive towards hardware calibration and verification at the
point of production.
In 2023, EPOS achieved ISO 14001 certification, highlighting our commitment to environmental responsibility. We also integrated our Quality Management System
and Environmental Management System
into a unified Integrated Management System, ensuring streamlined operations.
In 2024, we will prioritise internal audit enhancements to optimise further quality
management and environmental practices.
Simultaneously, we aim to advance our Integrated Management System through increased automation, specifically targeting
real-time document updates for improved
operational efficiency.

Training

We ensure that those working directlywith quality and environment are wellequipped to take care of their tasks.

EPOS products do not involve high-risk
quality or environmental issues. However,
we are aware that the lithium batteries inelectronics entail a safety and environmental risk, and we are attentive to andmitigate any risk related to this. We havetrained everyone in the updated QMS &EMS.

Areas of attention

Activities in this area cover:Due to the geographical location of ourmanufacturing partners, we work with anextended supply chain. This can entail arisk of uncertainty from production to distribution (mainly within Europe). This has
been further emphasised in the past few
years due to different macro-economic
factors, which have had an impact on the
global supply of semiconductors. To mitigate risk, we collaborate dedicatedly with
sub-suppliers to our manufacturing partners to ensure availability of material components, including long-term contracting.
We have been willing and able to meet
price climbs as well as adjust procurement
to ensure necessary components and inventory.

•

Audits and results

Working with manufacturers

EPOS operates with contract manufacturing and has not any in-house production.
Our suppliers are manufacturers located in
the Asia-Pacific region with whom wework closely to ensure conformity with Demant’s third-party compliance code.

•

Maintenance of product documentation to make sure that product information is up to date and correct.
Strategic procurement to secure availability and pricing on larger material
components such as semiconductors.

Working closely with our manufacturing
partners is key to our operations, and wehave teams to oversee this locally withsupport from EPOS headquarters.

External auditors from DNV conducted ISO
9001 and 14001 audits in 2023, identifying two minor non-conformities, 7 observations, and 11 opportunities for improvement.
By the close of 2023, we successfully addressed all but two observations, which
will be addressed in the upcoming 2024
audit.
Main suppliers hold relevant certifications,
including ISO/EN14001, ensuring that production complies with environmental
standards and compliance obligations.

In 2022, our quality tests, audits and inspections identified some quality issues at
the manufacturing site before shipping.
These were solved in 2023 in collaboration
with the manufacturer.
The audit list covers 95% of all procurement. The remaining 5% covers softer production partners such as earpads forheadsets.
Once a year, we invite our external partner
SGS to audit our production partners in
China in line with the Demant third party
compliance code.
All Tier 1 partners have approved andsigned the third-party compliance code.
We have corrected any critical or major
non-conformities from the audit in 2022.
Additionally, we conducted an audit in
2023, and the follow-up on corrective actions will be a priority for us in 2024.

RETURNRATE 1.2%

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Insights and highlights

The DemantGroup Group

Business areas

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Today’s hearing aids
are small, handy andalmost invisible
depending on yourhair length.
Steen, Pensioner, plays in a band.

Appendices
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Reporting scope andrequirements
The sustainability report is our way of illustrating our positive impact on the sustainable development goals, while also addressing the material risks that our business might pose to people, society and theplanet.

Standards and requirements

As part of a larger effort to continuously
improve the quality, comparability andtransparency of our reporting, we reference the sustainability reporting standardsof the Global Reporting Initiative (GRI).
You can find a GRI content index inappendices.

Scope of reporting

As we continue to improve and grow ourefforts to become a more sustainable
company, we also improve our reporting.
All information in this report covers the Demant Group, and the policies stated encompass all business areas and company
brands. It is clearly stated if reporting covers only part of the Group.

Unless otherwise declared, third parties
such as distributors and suppliers are notincluded in the reporting. To match thestructure of our sustainability strategy andactivities, we report on group-level andbusiness areas, respectively. While business areas are covered by everything disclosed as Group-reporting, they have individual projects and ambitions to
support our journey of becoming a moresustainable company.

Page

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Social and employee conditions

29-32

Environment and climate

19-26, 35, 44

Human rights

35-36

Anti-corruption and anti-bribery

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Gender composition in management

Page

Danish Financial Statements Act, §99d

The report covers the twelve-month period
from 1 January to 31 December 2023.

38

Data ethics policy

Discontinued business area
As announced on 27 April 2022, we havedecided to discontinue our Hearing
Implants business area, which is therefore
recognised separately as a discontinued
operation in our annual report. Thisbusiness area is therefore not included
in our 2023 consolidated reporting of theGroup’s sustaina ility efforts andadvancements, which also means that
Hearing Implants do not impact the current and future K I’s for Turno er and
CAPEX in the EU taxonomy reporting. This
does not apply tohistorical data.

Page
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Diversity policyPage

EU taxonomy for sustainable activities

8-9

59-61

Business model

Taxonomy eligibility and alignment

Point of contact
Trine Kromann-Mikkelsen
VP, Corporate Communications
and Sustainability+45 23 968 968
trkr@demant.com

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EU Taxonomy
The Demant Group’s reporting on U
taxonomy follows the Regulation (EU)2020/852 of the European Parliamentand of the Council. This requires nonfinancial listed companies to report theirenvironmentally sustainable economic
activities that are eligible under the taxonomy and aligned with the screening criteria for the two environmental objectives tobe contained in the reporting for 2022: climate change mitigation and climatechange adaptation.
During 2023 four new environmental objectives; water and marine resources, circular economy, pollution prevention andcontrol, and protection of biodiversity wereintroduced in Regulation (EU) 2023/2486,
which requires Demant to assess whether
there are economic activities that canqualify as eligible.
To determine Demant’s eligi leactivities we have screened our revenue,
Opex (the cost of research and development, short term leases, maintenance andrepair) and Capex (the net investments inproperty, plant and equipment, intangible
assets, and addition of right of use assets)
against the activities of the Taxonomy
Compass.

Changes since 2022

In 2022, Demant reported all eligible
activities according to our interpretation of
the requirements at the time. Since then,we have included expenses related to acquisition of buildings as an eligible activity
in Capex, as right of use assets is included,and comparative figures are restated. In
2022, acquisition and ownership of buildings should have been included as a taxonomy eligible but not aligned activity with
an impact of DKK 983 million and the proportion of total Capex 54%.

Findings for 2023

Demant is a hearing healthcare and audio
technology group with product and services which alleviates hearing loss andsupport virtual collaboration. With the introduction of four new objectives in 2023,
it has been identified that manufacturingof electrical and electronic equipment is an
EU Taxonomy eligible turnover activity.

Looking ahead

We continue to monitor the development
and guidance of the taxonomy.

Demant Sustainability Report 2023

59

GroupBusiness areas

Appendices

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TurnoverSubstantial contributions to objectives

Absolute
turnover

Proportion of
turnoverin 2023

Climatechangemitigation

Climatechangeadaptation

DKK
million

%

%

%

%

None

0

0

0

0

Turnover of taxonomy aligned
activities (A.1)

0

0

0

Of which enabling00

Of which transitional00Economic activity

Code

Water
and marine reCircularsources economy

Do no significant harm to objectives

Pollution
prevention andcontrol

Protection of
biodiversity

Climatechangemitigation

Climatechangeadaptation

Water
and marine reCircularsources economy

Pollution
prevention andcontrol

Protec- Minimum
tion ofsocialbiodiversafesity
guards

Propor- Categorytion ofenaturnover bling/train 2022 nsitional

%

%

%

Y/N

Y/N

Y/N

Y/N

Y/N

Y/N

Y/N

%

E/T

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

0

n/a

0

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

0

n/a

0

0

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

0

n/a

0

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

0

n/a

A.1 Taxonomy aligned activities

Taxonomy eligible but not aligned activities
Manufacturing of electrical andelectronic equipment

21,601

96

0

0

0

100

0

0

95

Turnover of taxonomy eligible but
not aligned activities (A.2)

CE 1.2

21,601

96

0

0

0

100

0

0

95

Turnover of taxonomy eligible
activities (A1 + A2)

21,601

96

0

0

0

100

0

0

95

842

4

5

22,443

100

100

B. Taxonomy non-eligible activities
Turnover of Taxonomy-non-eligible
activities

Total**Total revenue, annual report 2023, note 1.2.

Demant Sustainability Report 2023

60

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Opex
Substantial contributions to objectives
Water
and
marinereCircularsources economy

Absolute
Opex

Proportion of
Opex in
2023

Climatechangemitigation

Climatechangeadaptation

DKK
million

%

%

%

%

None

0

0

0

0

Opex of taxonomy aligned
activities (A.1)

0

0

0

Of which enabling

0

0

0

Of which transitional

0

0

None

0

Opex of taxonomy eligible but
not aligned activities (A.2)

Opex of taxonomy eligible
activities (A1 + A2)

Do no significant harm to objectives
Water
and
marinereCircularsources economy

Pollution
Protec- Minimum
prevention ofsocialtion and biodiversafecontrol
sity
guards

Propor- Categorytion ofenaOpex in bling/tra
2022 nsitional

Pollution
prevention andcontrol

Protectionof biodiversity

Climatechangemitigation

Climatechangeadaptation

%

%

%

Y/N

Y/N

Y/N

Y/N

Y/N

Y/N

Y/N

%

E/T

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

0

n/a

0

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

0

n/a

0

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

0

n/a

0

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

0

n/a

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

Opex of Taxonomy-non-eligible
activities

1,480

100

100

Total

1,480

100

100

Economic activity

Code

A.1 Taxonomy aligned activities

Taxonomy eligible but not aligned activities

B. Taxonomy non-eligible activities

Demant Sustainability Report 2023

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Appendices

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Capex
Substantial contributions to objectives

Absolute
Capex

Proportion ofCapex in
2023

Climatechangemitigation

Climatechangeadaptation

DKK
million

%

%

%

%

0

0

0

0

Of which enabling

0

0

0

Of which transitional

0

0

0

Economic activity

Code

Water
and marine reCircularsources economy

Do no significant harm to objectives
Water
and
marinereCircularsources economy

Pollution
prevention andcontrol

Protection of
biodiversity

Climatechangemitigation

Climatechangeadaptation

Pollution
prevention andcontrol

Protec- Minimum
tion ofsocialbiodiversafesity
guards

Propor- Categorytion ofenaCapex in bling/tra
2022* nsitional

%

%

%

Y/N

Y/N

Y/N

Y/N

Y/N

Y/N

Y/N

%

E/T

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

0

n/a

0

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

0

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

0

n/a

A.1 Taxonomy aligned activities
None
Turnover of taxonomy aligned
activities (A.1)

Taxonomy eligible but not aligned activities
Acquisition and ownership ofbuildings

CCM 7.7

1,030

56

100

0

0

0

0

0

54

Manufacturing of electrical andelectronic equipment

CE 1.2

211

11

0

0

0

100

0

0

8

Capex of taxonomy eligible but
not aligned activities (A.2)

1,241

67

100

0

0

100

0

0

62

Capex of taxonomy eligible
activities (A1 + A2)

1,241

67

100

0

0

100

0

0

62

607

33

38

1,848

100

100

B. Taxonomy non-eligible activities
Capex of Taxonomy-non-eligible
activities

Total*Proportion of Capex in 2022 is restated for Acquisition and ownership of buildings

Demant Sustainability Report 2023

62

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Appendices

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Accounting policies
Impact on health

R&D costs
As stated in note 9.1 Group accounting
policies in the Annual Report 2023.
Years of improved quality of life
Years of improved quality of life is calculated based on the estimated lifetime ofhearing aids and the number of hearing
aid fittings made by the Demant Group in
2023.
We have estimated the lifetime of hearing
aids to be just below five years, based ona sample of more than 500,000 hearing
aid fittings made by the Group over thelast five years.
These estimates consider factors impacting usage of hearing aids, including observed mortality rates. However, there arestill some systemic and human factors related to usage that have not yet been factored in. As hearing aid ecosystems evolve,
data will allow us to make better estimates, as hearing aids can detect many
characteristics of their usage, based on innovative use of the data from the microphones.
Facilitated screening and diagnosing
The estimated lifetime of a product in themarket, which is used daily, is seven years.
We sell around 27,000 relevant instruments a year, each instrument has an average of two and a half users who conduct

four diagnostics tests each (several different tests on the same person count as onetest). We base the calculation on a global
average of 250 working days a year. We
believe the estimated numbers used areconservative, but we have neverthelessadded a safety factor of app. ½ to arriveat the reported number. A similar calculation is used to arrive at the reported
screening number.
Number of people supportedwith headsets
Based on total amount of sold EPOS Enterprise incl VoIP headsets in 2023.

PeopleEmployees worldwide
Number of employees in the DemantGroup as of the 31 December 2023.
Gender diversity
Gender diversity is calculated based on thedata from the countries enrolled in our
global HR data management system. In
2023, 90% of our employees were registered in the system.
Gender diversity, all managers, shows thegender distribution between women andmen in percent among all people managers with one or more reports.
Global top-level management gender diversity shows the gender distribution

between men and women in managementlevels from Vice Presidents and up.
Global top-level management team gender diversity shows the percentage of toplevel management teams that are on or off
the target of 75% of all teams having amaximum of 75% of one gender.
Gender diversity, Board of directors shows
the gender distribution between womenand men of the shareholder elected members of the Board of Directors.
Employee turnover rate
Employee turnover rate is calculated by dividing the total number of terminations(voluntary and involuntary) excluding temporary and externals with the average
number of employees during the reporting
period and multiplying with one hundred.
The employee turnover rate is calculated
based on the 84% of the Demant population that has reported relevant numbers
into our HR data management system forthe full calendar year.
New hire rate
New hire rate shows the relation between
new employees and the average numberof employees during the reporting period.
Engagement rate
Engagement rate is the average engagement score given by the employees on ascale of 1 to 5.

Impact on climate and environment
Baseline recalculation
In 2022 and 2023, the Group grew significantly enough to adjust our baseline following our emissions baseline recalculation policy.

In 2023, we adjusted our baseline and following reported years to account for theacquired new entities Sheng Wang
(China), Shin Nion (Japan), Virtualis(France), Synapsys (France), Inventis (Italy)
and Goed (Belgium).
The new entities provided 2023 data forthem to be included into our accounting.
For all types of scopes from the newly
added legal entities, a back-casting to thebase year (2019) emissions was done fromthe 2023 energy consumption.
All the already included legal entities use
the whole group revenue growth in local
currency for the scope 3 emissions projection. For the newly added entities each ofthese use their own revenue growth in local currency for the back casting except for
Sheng Wang that uses its operational
growth, Shing Nion that provided primarydata for scope 1 and 2 from 2019 to 2022
and whose electricity consumption growth
was used as a reference for scope 3 andGoed Belgium, whose performance has
been consistent for the 2019-2023 period.

Demant Sustainability Report 2023

63

GroupEnergy consumption
Energy consumption entails actual and estimated consumed electric power, district
heating, natural gas, diesel, gasoline, coaland liquefied petroleum gas in megawatt
hours. Where coal is the only newly addedenergy source used for heating in parts ofChina.
The energy information is recorded andcentralized in our energy management
system where each legal entity contact
provides its monthly consumptions on a biannual basis.
The share of renewable energy represents
the amount of renewable energy that Demant used in its own operations. It is calculated as the energy consumed from renewable sources divided by the total
amount of energy consumed by the Group.
Renewable electricity and renewableelectricity share
In Demant renewable electricity comesfrom two sources: on-site generation andprovided by utility companies.
The locations with on-site renewable electricity generation refer to specific legal entities in Denmark, Poland and South Africa,
while the ones with bundled renewableelectricity correspond to France, Italy and
Poland. For those locations with on-site
power generation, the generated energy
comes from solar power; while for the bundled energy, the renewable electricity isprovided directly by utility companies.

Business areas

The share of renewable electricity represents the amount of renewable electricity
that Demant used in its own operations. It
is calculated as the electricity consumed
from renewable sources divided by the total amount of electricity consumed by theGroup.
Carbon emissions
Demant carbon accounting aligns with the
WRI/WBCSD Greenhouse Gas Protocol.
The consolidated emissions data comprises entities where Demant has operational control including emissions fromleased facilities. Carbon emissions aremeasured in terms of carbon dioxide
equivalent (CO2e)
Scope 1 emissions (direct GHG emissions)cover CO2e emissions from actual and estimated consumed natural gas, liquefied
petroleum gas, coal, gasoline and diesel.
Scope 2 emissions (own indirect GHG
emissions) cover CO2e emissions from actual and estimated purchased and consumed electricity and district heating.
The calculation of scope 1 and 2 emissions
is automatized in our energy management
system, which uses the emission factors
from the sources below. For scope 2, market-based emissions are calculated andused to compare Demant’s performanceagainst its climate targets.
Electricity: Market based emission factors:
US Residual mix (Green e- Energy emissions Rates), RE-DISS Residual European
Mix & the International Energy Agency

Appendices

Other energy sources: Department for Environment, Food & Rural Affairs (DEFRA)
Scope 3 emissions are estimated using primarily spend data from our Science Based
Targets baseline year 2019 following the
GHG protocol guidance. Only the material
categories of the 15 scope 3 categories of
the GHG protocol are shown in the scope 3
category split.
Scope 3 emissions from 2020 and onwards are calculated using the 2019spend based materiality assessment adjusted for revenue growth in local currency.

Business ethics andgovernanceCEO remuneration ratio
CEO remuneration ratio is calculated using
the annual total remuneration of the CEO
divided by the average remuneration of
Demant employees excluding the CEO.
Product recalls
Product recalls covers both voluntary andmandatory recalls.
Whistleblower reports
Number of cases received within the whistleblower hotline.

EU Taxonomy

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OPEX
Total OPEX covers direct non-capitalised
costs that relate to research and development, renovation of buildings, short-termlease, maintenance and other direct costs
relating to the day-to-day servicing ofproperty, plant and equipment. The KPI isdefined as taxonomy eligible OPEX (numerator) divided by total OPEX (denominator).
CAPEX
CAPEX consists of additions in property,
plant and equipment, intangible assets
excl. goodwill and addition of right-of-use
assets. The KPI is defined as Taxonomy eligible CAPEX (numerator) divided by total
CAPEX (denominator).

Additional GRI data
FTE
FTE is full time equivalent.
Accidents in production
Hearing Aids: Accidents in key production
and distribution sites in Poland, Mexicoand the US, as well as production andheadquarters in Denmark.
Diagnostics: Accidents in key production
sites in Poland, Denmark (prototype production), the US, Italy and Canada.

TurnoverTurnover is in accordance with Demant’s
annual report 2023, note 1.2. The KPI isdefined as Taxonomy-eligible turnover(numerator) divided by the total turnover(denominator).

Demant Sustainability Report 2023

64

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Appendices

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Additional GRI data
Please find more detail in accounting policies on page 63.

FTE by employee contract, by region, 2023*
RegionPermanent

Temporary

FTE by employee type, by region, 2023**

Externals

Total (#)

RegionFull-timePart-time

Total (#)

Europe11,314861

311

12,486

Europe11,591895

12,486

North America

4,320

28

26

4,374

North America

3,879

495

4,374

Pacific

920

7

10

937

Pacific

642

296

938

Asia

730

10

51

791

Asia

740

51

791

South America

973

13

1

987

South America

979

8

987

Africa

47

1

-

48

Africa48-

48

18,303920

399

19,224

17,8791,745

19,624

Total (#)

FTE by gender, by employee type, 2023**
Employee typeFemaleTotal (#)

Accidents in production, 2023

Men

Total (#)

Business areas

Full-Time

11,223

6,656

17,879Hearing Aids

13

Part-Time

1,412

333

1,745

Diagnostics

6

Total (#)

12,635

6,989

19,624

Total (#)

19

FTE by gender, by employee contract, 2023**
Employee contract

FemaleMen

Total (#)

Permanent

11,706

6,599

18,305

Temporary

730

190

920

External

200

198

399

Total (#)

12,636

6,988

19,624*Including externals**Excluding externals***One extraordinarily unfortunately accident resulted in a fatality

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GRI content index
Statement of use
GRI 1 used

Demant has reported the information cited in this GRI
content index for the period 1 January 2022 to 31 December 2022 with reference to the GRI Standards.
GRI 1: Foundation 2021

Disclosure
2-19 Remuneration policies

Location
Remuneration Report2-20 Process to determine remuneration

Remuneration Report2-21 Annual total compensation ratio

Remuneration Report

GRI 2: General disclosures 2021

4. Strategy, policies and practices

1. The organisation and its reporting practices

Disclosure

Location
Page 6, 12-13

Disclosure

Location

2-1 Organisational details
2-3 Reporting period, frequency and contact
point
2. Activities and workers

Page 72-22 Statement on sustainable development
strategy

Page 58

2-23 Policy commitments

Disclosure

Location

2-6 Activities, value chain and other business
relationships
2-7 Employees

2-24 Embedding policy commitments

Page 8-9
3 and 65

3. Governance
Disclosure
2-9 Governance structure and composition
2-10 Nomination and selection of thehighest governance body
2-11 Chair of the highest governance body
2-12 Role of the highest governance bodyin overseeing the management of impacts
2-13 Delegation of responsibility for managing
impacts
2-14 Role of the highest governance body insustainability reporting
2-15 Conflicts of interest
2-16 Communication of critical concerns
2-17 Collective knowledge of the highest
governance body
2-18 Evaluation of the performance of thehighest governance body

2-25 Processes to remediate negative
impacts

Page 37,44, 52, 56

2-26 Mechanisms for seeking advice andraising concerns

Page 37

2-27 Compliance with laws and regulations
Location
Corporate Governance Report
Corporate Governance Report
Corporate Governance Report
Page 11
Page 11, Corporate Governance Report
Page 11, Corporate Governance Report
Corporate Governance Report
Corporate Governance Report
Corporate Governance Report
Corporate Governance Report

Page 23, 29, 34-37, 44, 52,
56
Page 23, 29, 34-37, 44, 52,
56

2-29 Approach to stakeholder engagement

Page 34-37
Corporate Governance Report

GRI 3: Material Topics 2021
Disclosure

Location

3-1 Process to determine material topics

Page 123-2 List of material topics

Page 12Material Topics
GRI 205: Anti-corruption 2016
Disclosure
3-3 Management of material topics

Location
Page 35-36

205-2 Communication and training aboutanti-corruption policies and procedures

Page 37

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66

GroupGRI 302: Energy 2016

Business areas

Appendices

Back to content

GRI 405: Diversity and equal opportunity 2016

Disclosure

Location

Disclosure

Location

3-3 Management of material topics

Page 29-30

3-3 Management of material topics

Page 23302-1 Energy consumption within the organization

Page 30405-1 Diversity of governance bodies and employees

Page 3, 23-25

GRI 305: Emissions 2016

GRI 406: Non-discrimination 2016
Disclosure

Location

Disclosure

Location

3-3 Management of material topics

Page 19

3-3 Management of material topics

Page 29, 31-32

GRI 409: Forced or compulsory labour 2016305-1 Direct (Scope 1) GHG emissions

Page 31-32

Disclosure

Location

305-2 Energy indirect (Scope 2) GHG emissions

Page 31-32

3-3 Management of material topics

Page 35

305-3 Other indirect (Scope 3) GHG emissions

Page 32

GRI 414: Supplier social assessment 2016
Disclosure

Location

GRI 308: Supplier Environmental Assessment 2016

3-3 Management of material topics

Page 44, 52, 56

Disclosure

Location

GRI 416: Customer health and safety 2016

3-3 Management of material topics

Page 44, 52, 56

Disclosure

Location

3-3 Management of material topics

Page 44, 52, 56

416-2 Incidents of non-compliance concerning thehealth and safety impacts of products

Page 44, 52, 56

GRI 401: Employment 2016
Disclosure
3-3 Management of material topics
401-1 New employee hires and employee
turnover
GRI 403: Occupational Health and Safety
2018

Location
Page 20

Disclosure

Location

3-3 Management of material topics

Page 26403-9 Work-related injuries

Page 65

Page 3, 20

GRI 418: Customer privacy 2016
Disclosure

Location

3-3 Management of material topics

Page 38

GRI 404: Training and education 2016
Disclosure

Location

3-3 Management of material topics

Page 20404-2 Programs for upgrading employee
skillsand transition assistance programs

Page 20

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67