Life  Energy  Motion 

4 Insights from the Chairman and the CEO 6 Highlights 7 What we do and where we operate 10 Business purpose and sustainability strategy The importance of sustainability for our business strategy and purpose Sustainability governance and accountability Our approach Governance structure Accountability Sustainability policies 16 Sustainability priority areas Sustainability double materiality Priority areas 22 Transitioning to a sustainable future Climate action and decarbonization journey Waste reduction Innovation and circular economy 34 Working responsibly Culture and values Investing in our people Diversity, equity and inclusion Health, safety and wellbeing of employees 44 Fostering responsible business practices Business ethics Human rights and sustainable supply chains 50 Appendices Appendix 1: RBI content index Appendix 2: LEM ESG rating summary Appendix 3: Summary data table Appendix 4: List of acronymes
Andreas Hürlimann Chairman of the Board of Directors Frank Rehfeld Chief Executive Officer Dear Stakeholders, At LEM, we believe it is vital that all our stakeholders are able to form a clear view of how a company is addressing diverse social and envi- ronmental challenges: put simply, is LEM part of the solution or part of the problem? Thus, we are delighted and proud to present our first stand- alone Sustainability Report. We hope that what follows demon- strates how we are contributing to minimizing our own impact – for ex- ample, by reducing our direct and indirect carbon emissions. At the same time and perhaps more impor- tantly, this report explains how our business is in a unique position: we facilitate the enormous changes
needed to turn aspirations for a low carbon future into reality as a wide range of applications we are serving – electric vehicles, charging stations, renewable energy, trains – rely on our innovative components to moni- tor electricity consumption and optimize performance. This will also enhance our employer brand, mak- ing LEM a destination of choice for those who want to contribute to a more sustainable world. What we have achieved so far is due to the unfailing commitment and skills of colleagues across the busi- ness. While we should celebrate the progress made, it's important to acknowledge we are at a relatively early stage of the journey and still have much to learn if we are to real- ize our ambitious objectives. That is why we must tap into the knowl- edge, insights and requirements of our suppliers, customers and other stakeholders. Open and honest dia- logue will foster increasing collabora- tion and deliver mutual benefits for all parties. At the same time, we have to ensure that internal policies, structures and behaviors are aligned with our plans. The Board of Directors now has oversight on our sustainability journey, linking sustainability to our corporate strategy. Finally, since 2023, our Executive Management and senior leaders have a portion of their short-term incentive linked to the progress  we make towards our Greenhouse Gas (GHG) emis- sions reduction targets. We invite you to read this report, cast a critical eye over our progress and plans for the future and form your own view of how we have per- formed. We very much welcome your feedback. Highlights This section provides a snapshot of our highlights in FY 2023/24. For a more comprehensive view of our progress, please refer to our data table in appendix 3. Working in Employees New Labor and Human Rights Policy Refreshed Code of Conduct Policies to match our sustainability ambitions stand alone sustainability report ount of our own sites using renewable electricity New employee whistleblowing process Ambitious emission reduction commitments: reduction in Scope 1 and 2 emissions by 2025 reduction in Scope 3 emissions by 2040
LEM is a Swiss-based group specializing in current sensors for over 50 years. We work at the forefront of mega trends such as electrification, decarbonization, renew- able energies, automation and (e-)mobili- ty. With innovative electrical solutions, we are helping our customers and society accelerate the transition to a more sus- tainable future. LEM is a pure-play producer of current sensors with yearly sales of over CHF 400 million. Our team of 1,808 employees is spread over 17 countries. Our production sites, located in Beijing, Sofia, Penang, Tokyo and Geneva, create innovative products for our global customers. LEM engineering teams are located in Geneva, Lyon, Beijing, Shanghai and Mu- nich. Our global R&D presence ensures that we are close to our customers and that we benefit from the international talent pool to grow our teams. Please visit our website at ww.lem.com to find out more. LEM has built a strong reputation for manufacturing the largest range of high quality, precise and reli- able current sensors for a wide range of applications such as: Automotive (battery management, motor control) 1. Automation (tooling machines, robotics, 2. elevators, HVAC) Renewable energy (solar and wind inverters) 3. Energy distribution and high precision 4. (charging stations, test benches, MRI) Track (traction, trackside) 5. We have split our permanent workforce into two groups: direct labor (DL) which includes production line operators and indirect labor (IDL) which in- cludes everyone else. DL and IDL counts respec- tively for 40% and 60% of our employees. Our workforce gender split is 51% male and 49% fe- male. Please see the map showing our different lo- cations on the next page.
LEM headquarters Geneva, Switzerland ● PRODUCTION | R&D | SALES AGENTS | DISTRIBUTORS ● A leading company in electrical measure- ment, LEM engineers the best solutions for energy and mobility, ensuring that our customers, systems are optimized, reliable and safe. emea Geneva, Switzerland Frankfurt, Germany Vienna, Austria Brussels, Belgium Randers, Denmark Paris, France Padova, Italy Skelmersdale, UK Lyon, France Sofia, Bulgaria CHINA Beijing Shanghai Shenzhen Xian Hefei Taipei, Taiwan Wuhan AMERICAS Milwaukee, Wisconsin Detroit, Michigan Bridgewater, New Jersey Columbia, South Carolina Los Angeles, California rest of asia Pune, India Seoul, South Korea Tokyo, Japan Penang, Malaysia Our 1,808 people in 17 countries transform technology potential into powerful solutions and support our customers on a global scale. LEM has expanded its production capacities in the financial year 2023/24 with a new production facility in Penang, Malaysia. The new production facility enables LEM to supply the Asian markets as well as the US and Europe from Asia. The new plant complements the global network of existing production facilities in Geneva, Beijing, Sofia and Tokyo. Business
Sustainability Strategy
At LEM, we are proudly united behind one clear pur- pose: we help our customers and society accelerate the transition to a sustainable future. This purpose is not new to us, nor a nebulous dream; it is our com- pany's raison d'être and is central to our strategy and future growth plan. LEM’s current sensors play a key role in the energy and mobility transition underway and, with the megatrends of decarbonization and electrification accelerating, we are in a unique posi¬ tion to capture further growth. How does our strategy support our purpose to help customers and society cut carbon emissions? The answer is simple: 1. Our product strategy concentrates on technolo¬ gy to reduce carbon emissions and promote en¬ ergy efficiency in heritage industries. Our current sensors are found in low carbon industries and technologies that are critical to a sustainable fu¬ ture. These include electric vehicles (EVs) and re- newable energy technologies such as solar pan¬ els, wind turbines and heat pumps. We are work- ing to expand those businesses and develop fur- ther new energy and mobility applications such as intelligent EV charging, renewable energy storage plants and robotics, hydrogen electrolysis and smart cities. We are proud to help many industries to reduce carbon emissions by building current sensors that help our customers understand and monitor their energy usage. This drives energy ef- ficiency, including in energy intensive industries and industrial activities, such as traditional auto- motives and industry welding. 2. We recruit and nurture innovative minds and col¬ laborate with customers and universities to inno¬ vate. We attract and develop the best global tal- ent, working at the forefront of megatrends, such as electrification, decarbonization, renewable energies, automation and (e-)mobility. We initiate partnerships with science, technology, engineer- ing and mathematics (STEM) universities to attract young and emerging talents who will undoubtedly contribute to the emergence of new ideas and help us accelerate our product offering. 3. We build relationships with industry to implement and distribute our technologies as widely as pos- sible. We do this on two fronts: one by working with technology partners to leverage on existing or develop complimentary building blocks to our systems, especially for complex and miniaturized systems; and two by working closely with our customers to offer them solutions that best fit their product roadmap expectations. 4. We invest in next generation applications. We in- vest considerable financial means into the re- search and development of new technologies and products. Our R&D expenses represent 8.3% of our FY 2023/24 turnover. From mobility to ener- gy efficiency, public safety and security, LEM is capturing opportunities in new and accelerating markets such as AC measurement for smart grids. We are pioneering the miniaturization of our prod- ucts to reduce product size and weight which will bring further energy savings. The next frontier is to ensure that our own operations and value chain, processes and targets support our purpose. LEM is committed to leading by example and running our business sustainably and responsibly. We have set a target to become net zero by 2025 within our own operations (Scope 1 and 2 market-based). We have moved to a state-of-the-art new head office in Geneva, which received a Minergie label, and we reduced our emissions by more than 50% compared to our former offices. All our existing production sites are certified ISO14001 and our newest plant in Pen¬ ang, Malaysia, will soon be ISO14001 certified and re- ceive certification from the Green Building Index for innovative design. We have invested in renewable technologies, installing solar panels on the roofs of our key productions sites and in Energy Attribute Cer¬ tificates (EACs). Recognizing that the bulk of our greenhouse gas (GHG) emissions originate from our value chain, we have also set a target to be net zero by 2040 across our value chain. For this, we need a concerted effort, especially in our supply chain, to re- duce emissions further and achieve our net zero tar- get (see climate change section for more informa¬ tion). Our dedication to decarbonization will not be detri¬ mental to other environmental and social concerns. We acknowledge the significance of tackling a di- verse range of environmental and social issues be¬ yond just carbon reduction. While our sensors are crafted from raw materials and metals, some of which are procured through resource-intensive channels that may raise human rights concerns, we understand the need to improve their circularity and to reduce our ecological footprint throughout their entire lifespan. By closely collaborating with local partners, we prioritize waste reduction, uphold hu- man rights standards and strive to mitigate environ- mental impacts. Our commitment is one of account- ability and integrity, as we pursue a future character- ized by minimal carbon emissions. “ As Chief People and Sustainability Officer, I am delighted to share our first stand-alone sustainability report. Sustainability is at the core of why LEM ex- ists. Our business purpose is clear, we want to help our customers and society accelerate the transition to a sustainable future. This indicates our clear commit- ment to be at the forefront of developing high quality, innovative and low carbon technologies for our cus- tomers. It is a journey and a challenge but one that we are excited about and ready to take on.” Rodolphe Boschet Chief People and Sustainability Officer
LEM sustainability governance structure
● Flow of information Oversight, delegate Executive Committee Chief People and Sustainability Officer Head of Sustainability

Our approach
Sustainability-related regulation and expectations continue to evolve rapidly, reaching all areas of LEM's business. Therefore, ensuring the appropriate gov- ernance is in place is key to delivering on our sus- tainability commitments. Effective oversight and management of sustainability at LEM is essential to our sustainable success. To address these evolving regulations and expectations Rodolphe Boschet and Quentin Piat were appointed to sustainability-re- lated roles as Chief People and Sustainability Officer and Head of Sustainability respectively.
Governance structure
Our sustainability structure starts on the ground with six local green committees across our production and R&D sites. These committees meet once per month and are made up of volunteers passionate about sustainability; they enable local decision-mak- ing. The local committees are led by Green Commit- tee Leaders who meet once per quarter with the Head of Sustainability at the Green Committee Ex- change to share best practice and ideas between sites.
The Sustainability Committee is a separate commit- tee, where the global functional leads meet with the Head of Sustainability. The departments that are rep- resented include: Communications and Investor Re- lations, Facility, Global Product Management, HR, IT, Manufacturing, Purchasing, Quality, R&D, Sales and Supply Chain. At this monthly meeting, chaired by the Head of Sustainability, attendees exchange and coordinate on sustainability-related functional top- ics, compile and review implementation results and progress and cover pre-agreed priority topics for the Strategy Committee. Centrally, the LEM Executive Committee, under the lead of the Chief People and Sustainability Officer, is in charge of defining the strategy and our short and long term priorities. This strategy and the progress to- wards our goals is regularly reviewed by the Board of Directors (BoD). Since February 2024, LEM's Strate- gy Committee has the formal responsibility to review and submit to the BoD for approval LEM's sustainabil¬ ity strategy. This Strategy Committee is composed of three people, is chaired by our Chairman of the Board of Directors and meets several times per year.
Accountability
The Board oversees the success of our sustainabili- ty strategy and the Executive Committee is respon- sible for developing and delivering our sustainability strategy. In 2023 we established a sustainability de- partment which is working closely with representa¬ tives from all functions to build action plans and track our progress. The Head of Sustainability is re- sponsible for the day-to-day delivery of our sustain- ability roadmap. For the first time, in 2023, we intro- duced a Scope 1 and 2 reduction target in Executive Management and senior leaders' short-term incen¬ tives. As we are in the early stage of our journey, we cur¬ rently monitor our ESG and sustainability perfor- mance using a high-level roadmap and an internal dashboard with chosen monthly, quarterly and annu¬ al indicators.
Sustainability policies
We have introduced new policies and updated our existing policies to support our sustainability agen¬ da. These can be found below in our policy table:
Sustainability priority areas
Sustainability double materiality
In early 2024, we completed our first Double Materi- ality Assessment (DMA). This involved an in-depth assessment of LEM's impacts on people and the en- vironment as well as the financial risks and opportu- nities associated with sustainability. From climate change to human rights, we scrutinized every rele- vant sustainability topic across our entire operations and value chain including our governance. The goal was clear: to identify the most relevant sustainability topics for  LEM and guide our report- ing for compliance with the Swiss Responsible Busi- ness Initiative Due Diligence and Transparency Ordi- nance (RBI-DDTrO) and making progress towards compliance with the EU Corporate Sustainability Re- porting Directive (EU CSRD). But we did not stop there. We have capitalized on this assessment by using the results to redefine our sustainability priori- ty areas. The assessment was done in five stages. We: identified a long-list of potentially material mat- 1. ters gathered from European Sustainability Re- 2. porting Standards (ESRS) sustainability matters list, sector-specific topics from Sustainability Accounting Standards Board (SASB), existing peers’ DMA results, internal documentation and discussion as well as rating agencies' results; reduced the long-list to a more manageable short-list; defined the impacts, risks and opportunities 3. associated with those matters through several workshops with relevant internal experts; evaluated and prioritized the impacts, risks and 4. opportunities from the two perspectives: im- pact and the financial risks and opportunities that the matters present to LEM, which allowed us to fix our materiality threshold; and finally, validated the results with internal stakehol- 5. ders. Key internal stakeholders, including sub- ject-matter experts, were consulted throughout the different steps of the process to ensure a wide range of perspectives. The result is this comprehensive matrix of the most material matters. We have identified eight material topics represented in the below matrix and table. *Mandatory as per Swiss law Priority areas The most relevant sustainability topics based on our double materiality assessment are summarized in the table on the next page. These have become our sustainability strategic priorities. The impacts (pos- itive and negative), risks and opportunities were defined and assessed by our internal subject matter experts. The rating was then harmonized to ensure consistency across all material topics. As shown in the matrix below, the impact materiality threshold was set at 3 out of 5 and the financial materiality threshold was set at 2.90 out of 5.
Double Materiality Assessment (DMA)
DMA results highlighting the material topics for the company as a whole, with a rating aligned on the Entreprise Risk Management
Sustainability priority areas
In summary, the double materiality assessment has helped us analyze our impact on society and the en- vironment across our operations, value chain and in- to the future. It has helped us formulate a more im¬ pactful strategy centred on emissions reduction, waste management, circular economy, innovation for consumers, business ethics, our own workforce working conditions and supply chain human rights issues (conflict minerals and child labor) - the most relevant areas to our business. Although several top- ics did not exceed the materiality thresholds, it is worth noting that we are taking action to track and address those areas that are deemed to be either emerging topics or strategically relevant for our business. For the DMA and each material topic, the next steps, to be conducted in 2024/2025, are: 1. complete the DMA to make it fully CSRD aligned, collecting insights from external stakeholders, 2. ensure that we have adequate data collection systems and KPIs in place to report on the mate- rial matters under Swiss RBI-DDTrO and EU CSRD, 3. produce tactical roadmaps for each area, detail- ing the actions we will take to minimize negative impacts and financial risks, while maximizing pos- itive impacts and competitive advantage, 4. assess the action implemented using the above- mentioned identified KPIs and take corrective measures. Quentin Piat Head of Sustainability “ As the recently appointed Head of Sustainability, I am very proud of what we have achieved over the last year. It was a mix of very concrete actions to improve our sustainability posture and setting the solid foundations for our sustainability strategy with our first ever double materiality assessment and report. Working with colleagues across the busi- ness will be my focus to embed our sustainability strategy into day-to-day operations.” Transitioning to a sustainable future Climate change is one of the biggest challenges of our time, so enabling and accelerating the transition to a low carbon future that will limit global warming to 1.5C underpins our business strategy. Taking bold climate action is key to limit the physical and transi¬ tional impacts of climate change, which is essential for the future success of our business. We also know we cannot do it alone, so we need to work closely with our customers, suppliers and business partners to ensure we all take this journey together.
Impacts, risks and opportunities
The LEM board and leadership recognize that ur- gent action is required to significantly reduce the risks associated with climate change for LEM and the negative impacts LEM has on climate. At the same time, we have also identified strong opportu- nities for us to position ourselves as enablers of the transition to low carbon technologies in the indus- tries we work with. This is why climate change has been identified as one of our material topics. We have two potential climate-related risks: the first one is linked to disruptions in production lines, dam¬ age to assets, supply chain disruption caused by ad- verse weather events; the second is related to our business' inability to develop and deploy products, solutions and technologies that meet changing cus¬ tomer demand for more sustainable products. More- over, as we aim to position ourselves as a driver of de- carbonization, we also see opportunities for us to take action. With the accelerating trend towards electrifi- cation of mobility and infrastructure and the quest of energy efficiency, there is an opportunity for our busi- ness to flourish when we continue to focus on devel- oping those new solutions. We also have an opportu¬ nity to be part of the solution and drive decarboniza¬ tion across the sectors by developing innovative and efficient solutions that will reduce GHG emissions. Following the risks and opportunities associated with climate, our double materiality assessment also examined our impact. The vast majority of our emis- sions are associated with our upstream and down- stream value chain emissions (Scope 3), this is where we have our biggest negative impact.
Policies
We have a group environmental policy that underpins our commitment to monitor and control energy use and GHG emissions across our own operations and our value chain (see policy table on pages 14-15). It also commits LEM to actively listening to customers who rely on our contribution to their sustainability efforts. We also have a Group Environment Management System (EMS) manual, which highlights our vision for a common approach to our EMS, as well as a group Product Environment Profile (see case study on page 32). To communicate our minimum require- ments to suppliers we also have a group Code of Conduct and a Supplier General Requirements Man¬ ual (see policy table on pages 14-15).
Commitments, targets and measures
A key component of our plan to decarbonize is our commitment to reach net zero emissions by FY 2025 in our own operations (Scope 1 and 2 market-based) and by FY 2040 for our value chain (Scope 3). Our targets are to: – Reduce our Scope 1 and 2 (market-based) emissions by 90% by 2025 from a 2023 baseline. – Reduce our Scope 3 emissions by 90% by 2040 from a 2023 baseline. In 2023, one of the main areas of focus was to switch our own operations sites to renewable energy, where possible. Most sites buy renewable energy directly from suppliers and for locations (China) where this is not possible, we purchased Energy Attribute Certifi- cates (EACs) equating to 3.5 MWh of renewable electricity. Through our investments in EACs and our existing renewable tariffs, we have reached 87% re- newable electricity across our business compared to 2022 where we only had 37%. Our production sites in Geneva, Sofia and Beijing are now using 100% re- newable electricity, as well as our warehouse in Ger- many. Moreover, all our main production sites (Gene- va, Sofia, Penang and recently Beijing) also support the generation of renewable electricity via onsite so¬ lar panels where generated electricity is either used on site or fed into the grid. We have also focused on adopting energy efficien- cy technologies, for example, we have moved to our new head office in Geneva, in April 2022, which re- ceived a Minergie label. At this site, we reduced our emissions by more than 50% compared to our for- mer offices. All our production sites are certified ISO14001 and our newest plant in Penang, Malaysia, will soon be certified ISO14001 and certified by the Green Building Index for innovative design. In addition, we recognize that our role extends be¬ yond our own operations as a great majority of our GHG emissions (99%) comes from our suppliers, the use of our sold products and other parts of our value chain. To address this, we will continue to work with our suppliers and develop lower carbon emit- ting products, using less electricity during their life- time to support our customers in their transition to a low carbon future. In 2023, we have made significant progress reduc- ing our GHG emissions from our downstream trans- portation (intercompany transportation) (see case study on page 27). We have piloted a few GHG emis- sions reduction measures, including switching from air freight to train or sea freight, which have been positively received and has led to significant emis- sions reduction (1,000 tonnes of CO 2 e saved com¬ pared to 2022). Following the success of our pilot, we will be continuing this initiative next year. Working with key customers and co-developing in- novative solutions is vital to staying ahead in the market and being able to satisfy demand. A key technical advancement we are working on is our ap¬ proach to develop smaller, lighter, cheaper and bet¬ ter sensors – "miniaturization." We do it because it makes business sense and it is the right thing to do. For example, size is always a factor due to the limit- ed space within an Electric Vehicle (EV). Also, all components need to be of minimal size to make a vehicle as light as possible to minimize energy us- age and extend the distances EVs can drive be¬ tween charges. One good example of our drive to miniaturization is our success in optimizing power consumption in our magnetic sensor product groups (see case study on page 33).
Key performance indicators
In 2021, we started the process of calculating our carbon footprint, which allowed us to identify where the gaps are, thus building the foundation of our ap- proach to fully map and quantify our 2023 carbon footprint. In 2023, we evolved our methodology compared to last year. We have expanded our scope, adding new LEM entities in our Scope 1 and 2 emissions calcula- tions – our 2023 absolute data now covers all of our group entities besides eight small sales offices with one to five employees (in total 25 employees). As a result, our 2023 Scope 1 data has increased com¬ pared to 2022, from 37 tonnes of CO 2 e to 173 tonnes of CO2e. This is not a result of an increase in con¬ sumption but rather an improvement in the scope of data we have collected. This year's figure is an accu- rate representation of our global Scope 1 emissions. Compared to 2022, we have added our production sites in Japan and our newly built Malaysian site as well as our distribution centres in Germany and the US. In terms of absolute reduction opportunities, we have switched 100% of our Germany site cars to EVs. Our Scope 2 market-based figure reduced by 80% despite the increase in coverage. This is mainly due to our investments in EACs for our China locations and the switch to 100% renewable electricity in Bulgaria. In 2023, we successfully mapped out and determined which of the 15 categories listed in the GHG Protocol Corporate Value Chain (Scope 3) Standard are rel- evant to us. Out of the 15 categories, 12 were identi- fied as relevant to our business and three were not. The emissions from all our relevant categories have been calculated (see table below). Our Scope 3 GHG emissions make up 99% of our total carbon footprint and out of the 15 Scope 3 categories, our top three material categories are "category 1: pur- chased goods and services" (38% of our overall GHG emissions), "category 4: upstream transporta- tion and distribution" (19%) and "category 11: use of sold products" (39%). As a result of our change in scope, the increase be- tween 2022 and 2023 Scope 3 global figures is largely an artifact of better data collection and not linked to any significant increase in absolute emis- sions. We have added three new categories, includ- ing category 11 which makes up 39% of the global Scope 3 share. The inclusion of the new category 11 has had the biggest impact on the difference be- tween 2023 and last year.
*2022 data is not comparable to 2023 as we have significantly expanded the scope of the data collected and improved data quality. We have added more sites in 2023 for our Scope 1 and 2 emissions, we have added five new Scope 3 categories (category 3, 8, 10 to 15) and we have improved the robustness of our methodology and data collection for other categories (e.g Scope 3 category 1).
Plans for 2024
In the coming year we will be working on our net zero roadmap, identifying the key actions to prioritize and the key milestones needed to meet our net zero tar- gets. We will also develop and implement action plans across priority areas. We will prioritize actions through the drive of the R&D, Purchasing, Global Product Man¬ agement and Supply Chain departments mainly con¬ cerned by the key emissions highlighted above. We also see alignment with the Science Based Targets Initiative as a major step to validate our net zero road- map and this will be conducted in the next few years. In preparation for CSRD, we will also develop climate scenario analysis to better understand the risks, op- portunities and impact of climate change across dif- ferent plausible future climate scenarios. Case study Decarbonizing outbound intercompany transportation After assessing our GHG emission sourc- es, we realized the significance of prioritizing our intercompany transporta¬ tion for reducing our emissions. This intercontinental traffic between our production sites is 100% under our control and accounts for roughly 20% of our transportation emissions. Air trans- port is the primary reason for these emissions. To address this, we are transitioning gradually to rail and sea freight. In 2022, we initiated a pilot project to assess the feasibility of these alternatives. Additionally, we established replacement targets for our top five busiest lanes. Our roadmap begins with optimizing our busiest lane: – In 2022 we started shifting from air to rail ship- ments from China to Europe. Rail tonnage ratio represented 12% of the total goods shipped between those two areas and we targeted an increase to 50% by 2025. By the end of Decem- ber 2023, we already reached almost 50%, saving 741 tonnes of CO 2 e compared to 2022. – By the end of December 2023, we also pro- gressed in replacing air to rail/sea shipments on those other busy routes, where air shipment was the only transportation used, saving about 250 tonnes of CO 2 e: – China to Japan: 22% of the tonnage replaced. – China to USA: 7% of the tonnage replaced. – Bulgaria to USA: 6% of the tonnage replaced. - Bulgaria to China: 5% of the tonnage replaced. – Switzerland to China: 5% of the tonnage replaced. In 2023, we started to use a digital Transportation Management System to accurately track our trans- portation data. CO 2 e emissions are calculated for all shipments quoted in the platform for all modes of transportation after the delivery of the shipment. Supply chain managers at a global and local level are encouraged to leverage the benefits of the platform and move away from air transport as emissions re- duction are part of their performance objectives. We will continue to focus on developing alternative transportation modes throughout the next few years to reduce our impact. Tonnage CO₂ replaced by December 2023 compared to 2022
At LEM we see waste reduction as not only a sustain- ability imperative, but also a commercial imperative. Where we can innovate to reduce waste we do, re- ducing our demand for raw materials and therefore decreasing our impact on the environment.
Impacts, risks and opportunities
Our business relies on the ability to access raw mate- rials. This includes for our products and their packag- ing. Similarly to many industries, minimizing waste generated from our manufacturing process is import- ant for us to reduce our environmental impact and is the right thing to do. It reduces the impact on deple¬ tion of non-renewable resources through resource inflows, use and outflows of materials used in own operations and it reduces the impact on our custom¬ ers'  waste disposal through taking back customers' shipping packages to recycle/reuse at LEM. This is why, waste reduction has been identified as one of our material topics in our double materiality assess- ment.
Policies
We have a Group Environmental Policy that underpins our commitment to design innovative products with reduced adverse environmental impact from pur- chased components and production, to use and dis- posal as well as our commitment to manage our waste responsibly (see policy table on pages 14-15). The policy also ensures we set ambitious, yet realis- tic objectives, within the scope of the Environmental Management System (EMS), to achieve continual im¬ provement. Complementing the environmental poli¬ cy, we also have an Group EMS Manual as well as a Group Product Environment Profile (PEP) (see case study on page 32).
Commitments, targets and measures
LEM applies a waste hierarchy aiming to prevent, re- use, recycle and recover waste when feasible. Our waste management systems effectively handles both hazardous and non-hazardous waste. We work on reducing scraps in our manufacturing sites through miniaturization of our products and by sorting parts into different bi-products that can be reused. For example, we have separate bins to col- lect plastic and copper parts that can either be re- used or sold to other industries. We have estab- lished partnerships with specialized waste manage- ment companies to handle the sorting and resale of our waste materials, particularly metals. This proac¬ tive approach ensures that our waste is efficiently processed, with valuable materials extracted for re- sale to third parties. By working with these partners, we streamline our waste management processes, potentially generate revenue from materials that would otherwise be scrapped, contribute to envi¬ ronmental sustainability by reducing the need for virgin resources and ensure compliance with envi¬ ronmental regulations. Ongoing collaboration with our waste management partners allows us to also meet the Basel Convention Guidelines which con¬ trols transboundary movements and disposal of hazardous waste.
Key performance indicators
In 2023 our waste generated decreased by 33% compared to 2022 from 529 tonnes to 357 tonnes. The higher figure in 2022 is largely a result of moving our headquarters to a new location and the disposal of old goods and machinery.

Plans for 2024
In the upcoming year, our strategy encompasses a comprehensive data collection initiative focused on elucidating the fate of waste across various disposal methods, including landfill, recycling and beneficial reuse. We are also looking to take a deep dive into our various waste streams to identify priority areas. By tracking the trajectories of waste materials, we aim to gain valuable insights into improving our waste management system. This will also enable us to optimize resource allocation, minimize environ- mental footprint and lead to targeted approaches throughout our operations. Our aim is to foster a more resilient and responsible waste management system for the benefit of both our organization and our supply chain. Case study Managing our waste responsibly At our site in Lyon, we implemented a new waste sorting scheme in 2023 to ensure our waste is disposed of appro- priately. We began the project by raising awareness with posters and brightly colored and labelled bins. Em- ployees are sorting waste into a range of collection bins which ranged from cardboard, paper and glass to electrical and electronic equipment (WEEE) and hazardous waste including batteries. Where possi- ble we first seek to reduce the creation of waste and then to reuse the waste if feasible. Finally, we look to recycling, recovery and disposal as our final op¬ tions. For WEEE we particularly aim to reuse compo- nents before recycling and this year (2023) a total of 160kg of WEEE was collected to be recycled. Re- garding hazardous waste, we safely recycled, last year, 17 defective lead-acid batteries equating to around 800kg of waste which was prevented from reaching landfill. Electrical and electronic equipment collection bin
Innovation and circular
economy
Embracing innovation at LEM allows us to stay ahead of the curve, driving continuous improvement in our products and processes, while fostering creativity and adaptation to emerging challenges and oppor- tunities. Meanwhile, incorporating the circular econ¬ omy into our business practices quides us to a more regenerative approach where resources are utilized efficiently, waste is minimized and products are de- signed with longevity and recyclability in mind. By integrating these principles into our business eth- ics, we not only enhance operational efficiency and reduce environmental impact but also cultivate resil- ience, competitiveness and long-term value for our stakeholders.
Impacts, risks and opportunities
Our latest evaluation of double materiality under- scored the significance of the circular economy - resource inflows and outflows to our stakeholders. Several risks and opportunities were identified which impact our market share. If products are de¬ veloped and deployed that are too expensive for price sensitive customers, for which circularity is secondary, market share could reduce. Conversely, if we anticipate and meet changing customer de- mand for more circular and sustainable products, we can boost our market share. A further risk noted the usage of new and more complex materials including processes that require more or different resources and/or capabilities and competencies. Projects and developments have the potential to become more inefficient, offering customers a narrower product portfolio lacking innovation and failing to meet cus¬ tomer demand regarding products and costs. Following the risks and opportunities associated with the circular economy, our assessment also examined our impact. It highlights that LEM has a positive im¬ pact on the transition to a circular economy through the design of innovative products that reduce their adverse environmental impact (including the impact arising from production, use and disposal). Conse¬ quently, those products will have lower impact on the environment over their lifecycle, due to improve- ments such as the use of recycled materials, renew- able energy and recyclability. Reuse was also identi- fied as a positive impact area as components reach- ing end of life are often being reused by customers or are returned to us for reuse decreasing the ad- verse waste impacts. However, the assessment also acknowledged the negative impact LEM has through the depletion of non-renewable resources across resource inflows, use and outflows of materials used in the entire supply chain and own operations. Prod- ucts will also have a negative impact during their lifecycle e.g. energy used and at the end of life, waste will be generated by customers. Consumer information was also identified as an op- portunity in our double materiality assessment. LEM is well positioned to capitalize on the the increased demand for products and solutions that can help so¬ ciety make progress and address global challenges, such as tackling climate change by reducing energy consumption and GHG emissions and optimizing systems usage. Therefore, our impact will be on consumers through innovative electrical solutions that can help them and society accelerate the tran¬ sition to a sustainable future. Our sensors and solu- tions play a key role in monitoring and optimizing en¬ ergy consumption for the following applications: – Electric motor drives. - Power conversion. – Electrical safety. – Battery management. – Energy monitoring. – Energy metering.
Policies
Our overarching policy relevant to the circular econ¬ omy is our Group Environmental Policy, which can be found in our sustainability policies table on pages 14-15. It commits LEM to enhancing environmental protection and performance within our business. Specifically, it involves designing innovative prod- ucts which decreases the adverse associated envi¬ ronmental impacts from purchased components and production, to use and disposal. Other relevant inter¬ nal policies include our Group Environmental Man- agement System (EMS) Manual and our Group Prod- uct Environmental Profile. Regarding our consumer information topic area, several policies are relevant including our Group La- bor & Human Rights Policy, Group Employee Privacy Policy, Group Safety Policy, Suppliers General Re- quirements Manual and our Code of Conduct. All of these can be found in our sustainability policies ta- ble on pages 14–15.
Commitments, targets and measures
One of the measures adopted to mitigate the risks and embrace the opportunities mentioned above, is the creation of an environmental profile for new prod- ucts before launch. The profile includes recyclability and recoverability rates and material saving com- pared to models from previous generations. You can find several environmental profiles and eco-design sheets on our website. For example, in 2021, the total mass of the HST family sensor was reduced by 36% compared to the HSN family sensor launched in 2017. LEM also conducted fully fledged life-cycle analy- sis for six of our products, representative of LEM's technologies, to determine our wider environmental impact and identify circular opportunities. The re- sults were then extended to the overall LEM portfo- lio to calculate the final footprint of the full lifecycle of our products. We plan to train representatives from different func- tions (R&D, Purchasing, Industrial Engineering) from across all our sites on Product Carbon Footprint (PCF) and Life Cycle Assessment (LCA) calcula- tions. This will allow us to have the in-house exper- tise to calculate these ourselves for any new prod- ucts and to provide precise numbers to any stake- holder who requests it. Currently, this is done for us by a third-party company. By the end of May 2024, we will be releasing an in- ternal sustainability database, which will provide us with the opportunity to respond quickly and more accurately to any request coming from external stakeholders on ESG topics. It will be based on past enquiries we have received as well as question- naires from external stakeholders and the respective responses provided. LEM employees will be able to search key words and find the relevant explanation. A glossary will be added to define the usual and more complex sustainability jargon as well as a "raise a new request" functionality if the information found is not relevant. Last but not least, all the PCF and LCA information will also be internally accessible throughout this database, which will allow any em¬ ployee to have access to this information to re- spond to any queries (e.g., the Sales team). The da- ta available on the database will, of course, be up- dated on a regular basis.
Key performance indicators
In light of the inclusion of this topic as a material top¬ ic in our recent double materiality assessment, we will be working on identifying group level key perfor- mance metrics to track and monitor progress in 2024.
Plans for 2024
In the coming year, LEM is launching several new products with sustainability in mind. One of those products is the Open Loop Coreless Integrated (OLCI) current measurement sensor which exempli¬ fies our sustainability principles by significantly re- ducing weight and energy consumption. The prod- uct was also created with end-of-life in mind as it has been created with 100% recyclable materials (see case study on page 33). Circular economy: our Product Environmental Profile (PEP) When designing high performance products, LEM is committed to respect- ing the environment and the principles of sustainable development. Therefore, a Group Product Environmental Profile is filled out by the design centers during the product development process. The profile outlines our commitment and approach to design products with the least possible environ- mental impact on: – human health and safety, – natural resources: consumption of raw materials and energy, – ecosystem conservation: pollution of water, ground and air, – climate change. This profile is based on ISO 22628 for general princi¬ ples of environmental statements. It is currently used by our design centers to ensure compliance with reg- ulations such as RoHS (Restriction of Hazardous Sub- stances) Directive and REACH (Registration, Evalua- tion, Authorisation and Restriction of Chemicals). Moreover, it provides information on any environmen¬ tal improvements/benefits of the new product: – raw materials used, – packaging improvements such as rate of recy- cling (for e.g. minimum quantity in a package: six products. Cardboard packaging instead of individual polystyrene.), - use of alternative packaging to reduce environ- mental impacts – end of life such as recyclability or recoverability rate of the new product, – other key data points such as mass of product, mass of plastic parts, power consumption when in use, or packaging volume/product. In 2024, we aim to make this process for the design centers more streamlined and increase training for our team. Product Environment Profile for our IN 1000. Case study Designing sensors: more performance, less energy usage, less material Our new sensor, OLCI, which stands for Open Loop Coreless Integrated, is an example of our innovation and path towards sustainability. It has been de- signed to fit the needs of high current applications especially in the renewable energy segment (high power wind turbines, hydrogen electrolizers, etc.) The OLCI sensor provides a 1 MHz bandwidth which allows it to measure high current from 2,000 A up to 42,000 A without surge current limitations. Compared to existing solutions to detect and mea¬ sure current in these applications, the OLCI sensor is a more compact and lighter option with a weight up to 5 kg lower than comparable core based open and closed loop current sensors. We see the following arguments to claim the high sustainability characteristics of this new sensor: Tailored to sustainable applications: the main 1. usage of the new OLCI sensor is renewable energy systems such as high current rectifier stacks for Hydrogen electrolysis Coreless technology means that the OLCI sen- 2. sor has been designed without a magnetic core and secondary copper winding. This means the usage of different raw materials is reduced by 80% therefore reducing our GHG emissions on purchased components. The following are quan- tities saved for each sensor: – 1 kg of copper, – 750 g of potting material and plastic housing, – 500 g of magnetic material and miscella- neous components. The design of the sensor, with its large aper- 3. ture, allows for a simpler busbar design and as- sembly, reducing the number of screws and fix- tures needed. An intrinsic lower energy consumption compared 4. to existing solutions: the OLCI requires 85% less energy, saving up to 150 kW/h over a year which is equivalent to continuous usage of 3.5 x 5 W LED lamps. More sustainable packaging: the OLCI packag- 5. ing is: – Made from 100% recyclable material and, – includes 100% recyclable / recoverable material at end of life (Acc. ISO 22628:2002). The above-mentioned characteristics demonstrate our continuous approach towards miniaturization of our products and our constant focus towards devel¬ oping new technologies to reduce the GHG impact of our products. Finally, our OLCI will be produced in our plant in Bulgaria where our key suppliers for PCB and plastic cases are local therefore reducing the transportation footprint. Material and energy savings by using OLCI vs. two close loop sensors in parallel Working

Culture and values
4.
Player / learner mindset
– Follow the LEM Code of Conduct when mak- ing judgments and taking decisions. – Show humility and self-awareness. LEM is a global organization with 1,800 team mem¬ bers working in 17 countries. We are very much aware that the successful delivery of our company strategy and our ability to fulfil our purpose is highly dependent on us uniting behind a set of values and behaviors that we call the LEM Blue Behaviors. Our Blue Culture was born in 2021 as a cornerstone of our transformation journey to create a high-perfor- mance culture, based on empowerment, innovation and collaboration, where each of us can feel safe to express our full potential and showcase our talents. Over 100 employees representing most of our func- tions in various locations were involved in 15 work- shops and worked together to brainstorm and de- sign our LEM Blue Behaviors. They are a common frame of reference for behaviors to adopt in our dai¬ ly work. It is illustrated by concrete and operational practices, encouraged and valued within the com¬ pany and well supported by our processes which are designed to guarantee the sustainable success of our company. Below are a few examples of LEM Blue Behaviors for illustration purposes: 6. 1. Innovation and continuous improvement mindset – Promote new ideas and initiatives. – Use appropriate data to support decisions. Customer orientation and growth mindset 2. – Develop and sustain effective relationships with customers, gaining their trust and re- spect. – Balance short-term and long-term business objectives. Team player mindset (collaboration and team 3. developer) – Treat all people with respect, earn trust and support diversity in all its forms. - Communicate in an honest and transparent way. In 2023, we formalized the LEM Employer Value Prop- osition, which is strongly inspired by the way LEM colleagues experience our culture and purpose. To do so we have collected insights from a large group of employees on how it felt to work at LEM and what makes LEM different as an employer. The outcome has been summarized under the three pillars below: 5. Our mindset: connected by care – We support the personal within the profes- sional. Our culture not only embraces all identities, it encourages meaningful engage- ment between colleagues to activate the power of our diversity through teamwork too. Our culture: empowerment in action – We place our trust in people, empowering them to unlock their potential and act with purpose. Working at LEM is about creating the means that accelerate the transition to a sustainable future. 7.
Our growth: ingenuity in motion
– Developing cutting-edge solutions that en- able a more sustainable tomorrow is not just what we do, it is the mission that drives us. As leaders in our field, a career here is an in- vitation to be part of our winning team, con¬ tributing to our legacy of success and shap- ing future impact. Human capital development is a pivotal element at LEM, contributing to the effectiveness and efficien- cy of our business operations. Our mindset, skills and knowledge directly impact our ability to inno- vate, adapt to market dynamics and maintain a com¬ petitive edge. By investing in the continuous devel- opment of our employees, we ensure that they re- main equipped with the latest tools, techniques and insights necessary to excel in their roles.
Impacts, risks and opportunities
At LEM we highly value the remarkable contribution our people make every day. We also recognize the opportunity that arises from creating the best possi- ble work environment so that each of us can fulfil our potential. We are convinced that our sustainable success is highly correlated to the level of engage- ment and skills of our employees. Providing a physi- cally and psychologically safe working environment is a must. We work relentlessly to improve our work- ing conditions and ensure our people have access to the right training and development opportunities.
Policies
To ensure we are addressing the associated human capital risks and opportunities and positively im- pacting our employees, this year we introduced our new Labor & Human Rights Policy, which covers so- cial dialogue, working conditions, compensation and more. Other relevant policies include our Em¬ ployee Privacy Policy, Group Safety Policy and the recently reshaped Code of Conduct. You can find all of our sustainability-related policies in our policies table on pages 14–15.
Commitments, goals and measures
Listening to and engaging with, our employees is one of our top priorities. We aim to build a collabora- tive environment where employees can thrive from their first day at LEM thanks to our new onboarding program. To support our growth ambition we are actively add- ing new talents to the LEM team. New joiners are on- boarded via our comprehensive onboarding pro- gram, helping those who are joining LEM feel at home as quickly as possible. Onboarding is a critical step in the employee lifecycle which acts as a cata- lyst for employee satisfaction, retention and pro- ductivity. Our onboarding process has several com¬ ponents, including our LEM Explorer Path, which is a 90 day game-based program with missions, chal¬ lenges, quizzes, surveys, enigmas and group tasks to solve. We have also introduced Corporate Ses¬ sions every Friday which are led by Group Heads of Function to highlight the mission, challenges, orga¬ nization, roadmaps and key figures for new joiners. In the last Corporate Session there is dedicated time for employees to discuss with Frank Rehfeld, CEO, LEM's strategy and Blue Culture. The overall satis- faction score, from our latest cohort of 150 new joiners, was 4.7 out of 5. We engage with our employees and community through a number of channels, including our intranet (MyLEM) and bi-annual employee engagement sur- vey. We also engage in-person during regular gath- erings through townhall meetings, fireside chats, lo- cal festive events or jubilees. We measure the level of employee engagement through an employee en¬ gagement survey. The latest survey was conducted in 2022 and the next one is scheduled for early 2025. In our latest employee engagement survey we achieved above worldwide benchmark for all ar- eas including agility, energy, growth, purpose, rela¬ tionship and reward. It also demonstrated that our employees had a good understanding of our LEM Blue Behaviors described above. We continuously support the development and growth of our people, ensuring they have the right support and tools to succeed in their careers. At the end of March 2024, 74% of our employees were ac¬ tively using LinkedIn Learning and over 4,300 cours- es were completed on the platform, which represent- ed a total of 6,000 hours of training. Additionally, our goal for 2023 was to have all indirect employees re- ceiving on average 12 hours of face-to-face training per year. We overachieved that target as, on average, LEM people received 14 hours of face-to-face train¬ ing for a total investment of 18,800 hours of learning. The development and training needs are collected twice a year as part of our performance review cycle. This process, supported by our new Human Re- sources Information System, ensures that everyone knows what is expected from them and has the op- portunity to reflect on their individual career devel- opment. In parallel, we have extended the scope of our people review to allow us to identify and develop today the future leaders of LEM. The performance and people review process take into consideration the objectives achieved during the year and the hard skills assessment, which are delivered to the em- ployee following the LEM Blue Behaviors guidelines. In several of our locations, we offer apprenticeship and graduate opportunities to students who can gain on-hand experience working with our teams. To do so, we developed partnerships with STEM uni- versities in all the key areas where we are located. We are especially proud to underline long relation¬ ships with the Technical Schools J. Atanasoff and N. Vaptsarov in Sofia (see case study on page 38). Finally, we also monitor our voluntary turnover rate and the reasons why team members decide to leave. In 2023, our global voluntary turnover over rate de- creased to 6% from 7% in 2022.
Key performance indicators
We facilitate collective bargaining and social dialogue across our facilities. The data below shows that 44% of our European Economic Area (EEA) employees were covered by collective bargaining agreements and 90% have employee representatives. In non-EEA countries collective bargaining and employee repre¬ sentatives mechanisms are less common and our em¬ ployees are not covered. As described above, the immense majority of our DL and IDL employees participate in regular perfor- mance and career development reviews.
*For employees arrived before 30 September 2022 and potentially those who left after 30 June 2023.
Plans for 2024
Our quest to build the best team and create the best possible work environment will continue to be our priority in 2024. To that end, we are launching a ful- ly-fledged leadership development program, in which 200 LEM leaders will be enrolled. For each participant, it will involve seven full days of training including four face-to-face days and 360 feedback both at the beginning and at the end of the program, as well as active learning and coaching. Providing real world experiences to students Since 2015, LEM has been one of the partners of the dual education for the modern needs and requirements of the society (DOMINO) project, which focuses on modernizing Bulgarian vocational education to meet contempo- rary societal needs. The project's primary goal is to establish a framework and enhance the capacity for integrating work-based learning principles into Bulgaria's professional educa¬ tion system. Dual education was initially introduced in Bulgaria in 2015 through the "Swiss support for the introduction of dual track principles in the Bulgarian vocational education system" project, funded by Switzerland under the Bulgarian-Swiss Cooperation Program, with a total budget of CHF 3,530,000, sup- plemented by 15% co-funding from the Bulgarian Ministry of Education and Science. This five-year ed- ucational model entails a balance between class- room instruction and practical experience at produc¬ tion sites (in the last two years), varying according to students' grade levels. Collaborating with technical high schools and universities, we have provided stu- dents with invaluable opportunities to gain hands-on experience within our teams over the past years. LEM’s objectives were: – to support the improvement of the education provided in technical schools; - to enhance students' professional orientation by direct contact with production site and engi- neering processes; – to increase students' awareness of job opportu- nities in the country; and – to ensure long-term talent attraction by promoting the LEM employer brand. Between 2016 and 2023, 18 students graduated successfully in Dual education at LEM Bulgaria fin- ishing their five-year learning journey. Four of them joined us in different departments (Failure Analysis Engineering, Design Engineering, Product Quality) with permanent contracts whilst five new students are starting the program this year. Moreover, we reg- ulary offer summer job positions to these students to deepen their knowledge of our company. We are also continuously raising awareness among other technical students through two key initiatives enabling a better understanding of LEM as a dynam- ic and recognized employer in the electronics mar- ket in Sofia: – We welcome over 150 students from several high schools and from the Technical University Sofia every year on our premises. We organize compa- ny presentations, visits to the production floors and discussion with professionals. Our Electronic Design Lead, Zhani Dimchev, has - also been sharing his knowledge and experience of LEM products and technologies during dedi- cated lectures to students of the Faculty of Elec- tronic Engineering and Technologies in the Tech- nical University in Sofia. Dual education students visiting our plant in Sofia.
Diversity, equity
and inclusion
At LEM we recognize diversity, equity and inclusion (DEI), as an imperative that not only shapes our culture but also drives our success. Embracing DEI is not just a moral imperative; it is a strategic business decision that fosters innovation, enhances decision-making processes and cultivates a dynamic work environment where every individual feels valued and empowered to contribute their unique perspectives and talents. In this sustainability report we are pleased to dis- close several new diversity metrics, increasing not only our transparency but our accountability to all our stakeholders on our social practices. Newly reported DEI metrics include Executive Com¬ mittee and Senior Manager gender splits. They also include distribution of employees by age group. Our total headcount figures show an almost even split between men and women. Although our em- ployee gender split highlights our overall gender di- versity, our newly disclosed DEI metrics have high- lighted the gap across levels of seniority where women are clearly underrepresented at the top. This gap is even more obvious in technical, engineering, sales and R&D functions.

Key performance indicators
Below demonstrates a breakdown of our employ- ees by gender and age. As previously mentioned, 49% of our workforce are women and 51% are men. We have a total of seven Executive Commit- tee members, of which six are men and one is a woman. We also have 24 senior leaders within LEM, of which 20 are men and four are women. We also keep record of non-employee workers on our sites.

Plan for 2024
We are convinced that increasing gender diversity in leadership positions starts at the recruitment stage. One of the factors for success is to have a robust and non-biased hiring process to support our DEI commitments. This is why, in 2024, we will train HR colleagues and our hiring managers on how to identify and mitigate unconscious bias. The aim is to have our 200 leaders trained on this topic by the end of 2024. In addition, we will track and require that all candidate short lists, generated by both our external and internal recruiters, include both male and female profiles. In parallel, we will launch a series of initiatives to ensure that we con¬ tinue to build an inclusive work environment for women, this will include an assessment of our ben- efit offering and a dedicated mentoring program for our female leaders.
Health, safety and
wellbeing of employees
We take the health, safety and wellbeing of our em- ployees seriously. We firmly believe that a thriving workforce is built upon a foundation of robust well- being initiatives, comprehensive health support and unwavering commitment to safety procedures. To ensure we maintain the highest standards, our group health and safety policy sets out our expecta- tions for all prospective and current employees of the company as well as external people on any LEM site (e.g., volunteers, contractors, consultants). You can find all of our sustainability-related policies in our table on pages 14-15. During 2023, we have delivered health and safety training/refreshers across our key sites. They were both generic and specific to local needs (e.g. fire safety, chemical spills, lifting equipment). We also regularly host health prevention events, they aim to raise awareness of the importance of health and well-being and each take a specific focus, such as cancer prevention. In October 2023, we supported the HOPE association to raise awareness and funds among LEM Geneva employees for breast cancer. In March 2024, another event included talks from the Foundation and Otium Centres, Geneva Foundation for Cancer Screening and Cancer Support Switzer- land. Alongside these presentations, individual con¬ sultations with a holistic nutritionist were offered to employees. In line with the "care" pillar of our Employer Value Proposition, we support employee wellbeing, both in terms of mental and physical wellbeing. As such, sev- eral local entities are regularly subsidizing sport ac¬ tivities and events. For example, we support registra- tions at fitness studios in Germany and Switzerland and participate in local running events in Switzerland, France and Bulgaria. In China and Japan, where the "club" culture is well implemented, we foster partici¬ pation in sport and other leisure clubs to develop team spirit and wellbeing. Last but not least, we orga- nized our second LEM Cycling Challenge to unite LEM's riders from all levels in France, Switzerland and Bulgaria who all had to cycle through diverse terrains and picturesque vistas for 200 km from our site in Geneva to our R&D center in Lyon. LEM cycling challengers departing from our site in Geneva.
1 200,000 is a fixed coefficient (50 working weeks x 40 hours x 100): see osha.gov Finally, to ensure our physical locations are condu¬ cive to high productivity, collaboration, innovation and employee wellbeing, we have embarked upon a refurbishment program for offices in Bulgaria, China, France and the United States. We have also opened new offices in Bulgaria, China and France. Where possible these offices are more efficient to reduce our carbon emissions and provide revamped work- ing conditions with ergonomic space, natural light, low-noise working atmosphere and state-of-the-art IT equipment for our employees.
Key performance indicators
We track and monitor the number of work-related accidents/incidents and fatalities year on year. Over the past year, we have had five work-related acci¬ dents reported, with an accident rate of 0.30 and eight work-related incidences with the incident rate of 0.47.
Plan for 2024
To improve our day-to-day comprehension and monitoring of health and safety, we plan to define and implement a dedicated health and safety man¬ agement system for the group over the next year. It will be composed of a set of policies, guidelines and/or tools to reduce work-related accidents, inci¬ dents, illness and dangers to employees. Ultimately, the target is to have zero work-related accidents and incidents by employees and non-employees. To calculate precisely our CO 2 footprint for Scope 3 category 7, Employee Commuting, we ran the first employee commuting survey in early 2024 across all our entities. We collected a 75% response rate showing the interest of our employees towards such a topic. Following the results, we are committed to support our employees to reduce their individual im¬ pact. Hence, we will define and implement local ac¬ tion plans supported by a global framework to help our employee to use more sustainable transporta¬ tion means (i.e. EVs, public transportation, car-pool- ing). To continuously support wellbeing, we will put a strong focus on developing healthy mobility such as walking and (e-)biking. Moreover, we will contin¬ ue supporting local healthy initiatives. Fostering responsible business practices Responsible business practices lie at the heart of everything we do, from the way we treat our employ- ees, to our relationships with suppliers, our interac- tions with customers and the conditions in our sup- ply chain. We strive for the highest standards of in- tegrity, honesty and transparency. To underscore this commitment, we became signatories to the United Nations Global Compact in September 2006 and since then, we have diligently adhered to its 10 Principles and 17 Sustainable Development Goals.
Impacts, risks and opportunities
Our recent double materiality assessment unequivo- cally reaffirmed the pivotal role of business ethics at LEM for our stakeholders and our business. We are delighted to share that LEM's commitment to trans- parent and ethical business practices has yielded a material positive impact on society, employees, customers, shareholders and suppliers. This affirma¬ tion underscores the effectiveness of LEM's com- prehensive whistleblowing process, policies, train- ing initiatives and other endeavors aimed at foster- ing ethical conduct throughout our operations. Moreover, our double materiality assessment shed light on the potential risks posed by financial loss or damage should LEM falter in complying with busi- ness ethics regulations, alongside the threat of eroded market share and customer dissatisfaction in the event of a serious violation. Confident in our ability to navigate these challenges, we remain steadfast in our commitment to robust and evolving business ethics and compliance practices, as elab- orated in the forthcoming paragraphs.
Policies
Our recently refreshed Code of Conduct stands as the cornerstone of our responsible business ethos, delineating the conduct LEM anticipates from all stakeholders across the globe. Complementing this pivotal document are a series of updated policies designed to offer additional practical guidance in critical risk domains. These policies, such as the Group Anti-Bribery and Anti-Corruption Policy, the Group Labor and Human Rights Policy and the Group Whistleblowing and Investigation Policy, form a ro- bust suite that reinforces our commitment to ethical practices. For a comprehensive overview of all our sustainability-related policies, please refer to our policies table on pages 14–15.
Commitments, goals and measures
At LEM, we have fostered a steadfast culture of eth- ics and integrity that permeates every aspect of our organization. Our unwavering commitment is to conduct our operations in strict adherence to the laws and regulations of the regions we operate in and we hold our business partners to the same high standards. Central to our ethical framework is our comprehensive Code of Conduct, crafted to serve as our moral compass. Translated into 11 languages and recently updated in 2023, this Code offers guidance for both our employees and business as- sociates on the conduct expected to uphold our core values and principles. It includes details on safeguarding intellectual property and sensitive business information. A significant achievement this year was the unveiling of a dedicated intranet page for Legal, IP & Compli- ance. This centralized hub provides our employees with access to a wealth of essential resources, up- dates and guidelines, essential for navigating the in- tricate landscape of regulations and safeguarding our organization's interests. Our Legal, IP & Compli- ance intranet page categorizes documents into three distinct sections: policies and procedures, training materials and templates (including those tai- lored for purchasing, sales and various other func¬ tions). This structured approach ensures seamless access to the precise documents we need, foster- ing efficiency and promoting seamless compliance. Another key milestone in 2023 was the enhance- ment of our Group Whistleblowing and Investigation Policy. This internal policy outlines our robust and streamlined internal reporting process, which in- cludes a secure whistleblowing platform. Hosted and managed by a trusted third-party provider, this platform extends its accessibility to all employees and external stakeholders alike. Offering diverse communication tools, including a hotline number and messaging service, it ensures multiple avenues for reporting concerns. We also have a web portal on our internet and intranet page from where users can raise their concerns. To coincide with the up¬ dated policy's launch, in early 2024, we initiated a comprehensive awareness campaign across all LEM sites, highlighting the importance of whistleblowing (see case study on page 47).
Key performance indicators
Upon joining LEM, each employee is required to en¬ dorse the Code, symbolizing their personal dedication to our ethical standards. We are proud that, as of 31 March 2024, we have achieved an impressive 98% signature rate for the updated version, which was launched just two months prior (1% is missing due to employees on long-term sick or maternity leave). We also successfully delivered training to 98% of our employees on our new whistleblowing processes.

Plans for 2024
In 2024, we will update our Group Disclosure and In- sider Trading Policy alongside our Data Privacy Poli- cy. Additionally, we are in the process of crafting a new Anti-Trust and Competitive Practices Policy. Our focus extends beyond mere policy creation; we are committed to fostering universal comprehension and integration of these policies across our diverse sites, cultures and positions within the organization. This concerted effort ensures that our ethical and compliance standards resonate consistently throughout our global footprint, reinforcing our commitment to integrity and transparency at every level of our organization. We will also continue to prepare for the upcoming CSRD as well as engage with relevant sustainability rating agencies. At the onset of 2024, we introduced our cutting-edge whistleblowing process complemented by our updated Whis- tleblowing and Investigation Policy. Aligned with LEM's core values, this policy underscores our commitment to install ethics at the centre of our corpo- rate culture, prioritizing the welfare, safety and wellbeing of our employees, business partners and wider public stakeholders. Applicable across LEM Holding SA and all of its subsidiaries, offices and sites worldwide, this policy extends to every member of our Board of Directors, executives, officers and employees, regardless of their geograph- ic location. Moreover, it provides a mechanism for any third party to report a potential breach of LEM’s Code of Conduct or of any relevant laws and regulations in accordance with the terms outlined in the policy. This Policy oper- ates in conjunction with LEM's Code of Conduct and its associated policies, serving as a comprehensive framework for ethical conduct across our organiza¬ tion. The whistleblowing platform is operated by an inde- pendent and secure reporting service, ensuring confidentiality and integrity in the reporting pro- cess. Accessible in all languages relevant to LEM's global operations, this platform is seamlessly inte¬ grated into our intranet MyLEM and our corporate website. Any whistleblowing concern can be filed by telephone, email, letter or web application at: LEM Whistleblowing Center. For stakeholders who prefer anonymity, the platform offers the option for anonymous and secure reporting in accordance with local regulations where permitted. Additionally, upon request, whistleblowers have the opportunity for a face-to-face meeting within a reasonable time- frame, ensuring a personalized and supportive ap¬ proach to addressing concerns. Communication campaign on our state-of-the-art whistleblowing tool.
Human rights and
sustainable supply chains
At LEM, we are unwavering in our dedication to pro- ducing current sensors responsibly. Our guiding principles revolve around upholding human rights and championing sustainability throughout our sup- ply chain. Our sustainable purchasing program marks the beginning of a transformative journey. Since its inception in 2023, we have been diligently laying the groundwork for a new approach. This initiative evi¬ dences our ambition to instil responsible business practices not only within our organization but also throughout our supply chain. We understand the ur- gency of addressing sustainability challenges. That's why we are actively collaborating with our suppliers to infuse sustainability into every facet of our supply chain.
Impacts, risks and opportunities
Our commitment to human rights and sustainable supply chains extends across all relevant Environ- ment, Social and Governance (ESG) topics. From emissions reduction to ensuring fair working condi¬ tions, protecting whistleblowers and minimizing waste, we steadfastly uphold the highest standards in every aspect of our operations. Our recent double materiality assessment highlighted conflict minerals and child labor as crucial topics for our stakeholders and our business. These are areas where LEM faces significant exposure to material risks. Failure to ad- dress these issues adequately could lead to adverse impacts on both people and society, as well as po- tential financial implications for LEM. We are commit- ted to address these challenges head-on. The follow- ing sections outline our strategic approach and con¬ crete actions to mitigate risks and drive positive change in these critical areas.
Policies
In 2023, LEM took significant strides in fortifying its commitment to labor and human rights by introducing a new Labor and Human Rights Policy. Our new policy serves as a cornerstone of our commitment to up- holding labor and human rights standards throughout our operations and supply chain. Furthermore, we launched our Whistleblower and Investigation Policy in 2023, underscoring our commitment to fostering a culture of transparency and accountability. We updat¬ ed our Code of Conduct in 2023, which sets forth the ethical principles and standards that guide our inter- actions with stakeholders and inform our business practices. Those new and updated policies are based on international standards such as ILO, OECD and UNGP. You can find all of our sustainability-related pol- icies in our policies table on pages 14-15. We also revised our Supplier Manual in 2023 with an expanded section on sustainability. Our Supplier Manual articulates our expectations for suppliers and includes specific commitments such as: pro- moting fair labor practices and contributing to posi¬ tive social change in our communities and maintain- ing the highest standards of corporate governance and business ethics. All direct suppliers are required to sign our Supplier Manual and to confirm their commitment to upholding the standards delineated in our Code of Conduct.
Commitments, goals and measures
At LEM, we proactively address our impacts, risks and opportunities to protect human rights and en¬ hance the sustainability of our supply chain. Our steadfast dedication to sustainable practices under- scores our holistic approach as we navigate the in¬ tricate balance between commerce and social re- sponsibility. By incorporating rigorous standards, transparent practices and collaborative measures we can ensure our growth is robust and sustainable. We extend our high standards of responsible business practices throughout our supply chain. To ensure alignment with our values and expectations, all new suppliers go through a stringent Procurement Risk As- sessment before being approved as a LEM supplier. This assessment, updated in 2023, includes 19 de- tailed questions focusing on responsible practices and sustainability across several areas. For example, we in¬ quire about the existence of a due diligence program to monitor child labor within their own supply chain. Moreover, as highlighted on page 47, our state of the art whistleblowing platform is publicly available and easy accessible to all our suppliers, should they have any issue to raise on human rights, including child labor.
Due diligence and
transparency matter
according to Art. 964j-l CO
Minerals and metals:
In compliance with the Swiss Ordinance on Due Dil- igence and Transparency, we mapped the minerals and metals, against the quantities defined in the An- nex I of the Swiss ordinance. Our analysis confirmed that, in 2023, we did not import any materials into Switzerland above the defined thresholds, thus ex- empting us from further obligations in Switzerland.
Human rights and child labor
We conducted a gap analysis of our current due dil- igence process against Swiss Due Diligence and Transparency Ordinance (DDTrO) and international guidelines on business and human rights incl. child labor. This analysis identified priority areas and laid the foundation for shaping a new and enhanced due diligence program and risk assessment ap- proach based on international frameworks such as the OECD and United Nations Guiding Principles on Business and Human Rights.
Key performance indicators
We continue to strengthen our approach to human rights and sustainable supply chains. As of now we have identified the the three KPIs below to monitor. We have started to undertake internal audits of our Human Resources function, looking at controls in place including human rights. As we have just re- cently updated our new supplier manual and we will be tracking its signature going forward.
Plans for 2024
Our next focus is to ensure that our top 45 direct sup- pliers, which collectively represent 90% of our direct supplier spend, sign our newly updated Supplier Manual and confirm their alignment to our new Code of Conduct. As part of our commitment to promoting human rights, we will integrate routine human rights checks into our existing quality audit processes. These checks, based on the Procurement Risk As- sessment, will enable us to monitor our suppliers' progress in upholding human rights standards. Over the next 18 months, we will roll out our roadmap to enhance our due diligence system to address both human rights (incl. child labor) and minerals and met¬ als issues. This will involve strengthening our Suppli¬ er Due Diligence process and enhancing supplier en¬ gagement. This has been articulated and formalized into a Purchasing Strategic Development Plan where the key components of this roadmap include: – Developing a human rights risk assessment process aligned with international standards and emerging regulatory requirements identified in our gap analysis. – Understanding our suppliers' commitment to LEM's sustainability priorities and encouraging them to develop improvement plans for key issues such as reducing GHG emissions (Scope 3) and implement- ing their own child labor due diligence processes. – Involving our top 45 direct suppliers, representing 90% of spending, in these initiatives to drive collective progress. – Conducting regular follow up of our supplier action to plan and reassessment of their impact.
Appendices
Appendix 1: RBI content index

Appendix 2: LEM ESG rating summary

Range: no medal to platinum CDP is a not-for-profit charity that runs the global disclosure system to manage companies' environmental impacts. We have completed the CDP Climate Change questionnaire and received a "C" rating for awareness.
Score C Range: A to D and F
MORNINGSTAR | SUSTAINALYTICS
Score 13 Range: 0 to 40+ Communication on Progress on the ten principles submitted Range: no range Morningstar sustainalytics provides analytical ESG research, ratings and data to institutional investors and companies. In 2023, LEM received an ESG rating of 13 and was assessed by Morningstar Sustainalytics to be at low risk of experiencing material financial impacts from ESG factors.
The UNGC is a global corporate sustainability initiative. We have been a signatory of the UNGC since 2006. As part of this, we have committed to submit a Communication on Progress (CoP) questionnaire.

Appendix 3: Summary data table

Appendix 4: List of acronymes

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