Improving step by step How Sivantos Group takes responsibility as a UN Global Compact signatory 24.05.2017 – 23.05.2018
C S R R E P O R T 2 Thank you so very much We wish to thank all those who contributed to this CSR report / Communication on Progress: Ananda Naude, Toshikazu Shioji, Mark Laben, Christina Diering-Lockhausen, Vijayan Warrior, Isabel Restivo, Dave Biddiscombe, Joerg Pahlen, Yaping Xu, Cristina Regalia, Bruna DeCarvalho, Christiane Timmermann, Lim Summer, Patrick Lau, Hauke Waszkewitz, Ralf Soldner, Caroline Thomas, Oliver Ninkovic, Ragini Chaurasia, Stephanie Nickel, Tina Meier, Luisa Schuster, Maria Bertling.
Dear readers, S Sivantos Group is a leading manu- facturer of hearing aids with a rich history of 140 years. We started out as a Siemens Business Unit before we became an independent com- pany, in January 2015. This has given us the opportunity to start our journey of transformation and to completely re-invent our company from the ground up. Our transformation, along with our legacy and strong product portfolio, puts us in a clear position to drive growth momentum today and into the future. As we all know, a growing business means growing re- spon sibility – and we are happy to take on this extra responsibility. As we begin to find a global system that equally rewards innovation and sustain- ability, we have been proud participants of the United Nations Global Compact Initiative since May 2017. Since this time, our international CSR team has explored ways to better use Sivantos’ knowledge to contribute to the Global Compact’s goal of making this world a better place. According to the latest WHO-research, approx. 466 million people worldwide have disabling hearing loss. It is estimated that by 2050 over 900 million people will have disabling hearing loss. We take this on as a challenge to use Sivantos’ unique expertise to tackle hearing loss globally. In addition to working hard to provide the best possible hearing aids and services, we run awareness campaigns for hearing loss and its solutions. We also donate to charities and causes, fund research, train audiologists, reduce our global consump- tion, and pioneer in the field of energy efficient hearing aids. We know that these are just our first steps and we are committed to continuing and expanding our ongoing campaigns. It goes without saying that Sivantos reaf- firms its support of the Ten Principles of the United Nations Global Compact in the areas of Human Rights, Labor, Environment and Anti-Corruption. In this annual Communication on Progress, we give details of our actions to continu- ously improve the integration of the Global Compact and its principles into our business strategy, culture, and daily oper ations. We are also committed to sharing this infor mation with our stakeholders using our primary channels of communication. Sincerely yours, Ignacio Martinez CEO Sivantos Group C S R R E P O R T 3
We love to engage … The Ten Principles of the United Nations Global Compact are derived from: the Universal Declaration of Human Rights, the International Labor Organization’s Declaration on Fundamental Principles and Rights at Work, the Rio Declaration on Environment and Development, and the United Nations Convention Against Corruption. For more information on our CSR activities, please visit www.sivantos.com/societal-impact “These principles are setting the stage for long-term success.” C orporate Social Responsibility (CSR) means that we recognize the impacts our activities have on our society, the environment, and the people around us, and act accordingly. CSR is not only our responsibility, but at the same time, an opportunity for us to engage with our internal and external stakeholders on a new level. The UN Global Compact (UNGC) provides a com- pany’s value system and a principles- based approach to doing business. This means meeting fundamental responsi- bilities in the areas of human rights, labor, environment and anti-corruption. By incorporating the Ten Principles of the UN Global Compact into strategies, policies, and procedures, and by estab- lishing a culture of integrity, we are not only upholding our basic responsibilities to people and our planet, but also setting the stage for long-term success. C S R R E P O R T 4
The Ten Principles of the UNGC Human Rights Environ- ment Principle 1: Businesses should support and respect the protection of internationally proclaimed human rights; and … Principle 2: … make sure that they are not complicit in human rights abuses. Labor Principle 7: Businesses should support a precautionary approach to environmental challenges; Principle 8: Undertake initiatives to promote greater environmental responsibility; and … Principle 9: … encourage the development and diffusion of environmentally friendly technologies. Principle 3: Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining; Anti Corruption Principle 10: Businesses should work against corruption in all its forms, including extortion and bribery. Principle 4: The elimination of all forms of forced and compulsory labor; Principle 5: The effective abolition of child labor; and … Principle 6: … the elimination of discrimination in respect of employment and occupation. C S R R E P O R T 5
Upholding these principles R especting human rights has traditional- ly been a core value of Sivantos and is part of our Business Conduct Guidelines. We have a mul- tisite OHSAS 18001 certifi cation for our manufacturing sites in Suzhou and our office in Singapore that gives proof of our firm commitment to upholding a safe work environment. As a provider of hearing aids and other medical hardware we understand that product safety can never be com- promised as errors in our technology could lead to significant and potentially life-long damages. We can proudly say that since we have been diverted of Siemens and become an independent company, there have been no product safety related recalls. Finally, employee satisfaction forms one of our pillars of success. We conduct annual anonymous surveys among our employees to understand them better. The number of employees who are satisfied with their work at Sivantos had decreased by ten points, from 2016 to 2017, however is forecasted to rise again in 2018. No product safety related recalls since we became an independent company in 2015. s t h g i r n a m u H C S R R E P O R T 6
W e fully respect labor standards in all forms as outlined in our Business Conduct Guidelines and our Code of Conduct. Sivantos strongly opposes all forms of forced or bonded labor and complies with mini- mum wage standards in every country of operation. To pro tect workers from work- place harassment, including physical, verbal, sexual or psychological harassment, abuse or threats, Sivantos has an ombudsman where every employee can anony- mously submit a complaint without fear of reprisal. r o b a L The latest automation technology paired with the most exquisite craftsman- ship. This is how we manufacture our hearing aids. Working towards Operational Excellence: A coworker in Poland. C S R R E P O R T 7
Upholding these principles S ivantos avoids envi- ronmental damage via the regular main- tenance of production processes and environmental protection systems. We have an ISO 14001 certifi cation for two of our three main manufacturing sites in China and Singapore. Additionally, Sivantos applies the standards of the “ Agenda 21” on Sustainable Develop- ment and promotes envi- ronmentally friendly tech- nologies aligned with the UN Global Compact initiative. In 2017, we managed to reduce our water consumption to 85 % of 2016’s level. We equally lowered our electricity usage by 89 GWh despite growing business operations. We established R&D PREP (Product Related Environ- ment Protection) procedures to ensure that hazardous substances are not used during the design of a new product. Furthermore, Sivantos abides by the cur- rent requirements of EU RoHS Directive (2011/ 65/EU) and REACH regulations (No. 1907/2006). We manage these requirements through supplier control and material compliance. All our main locations use FSC compliant paper. We also adhere to the European Waste Electrical and Elec- tronic Equipment Directive (WEEE Directive 2012/19/EU) 2016 2017 We manaed to reduce our water consumtpion 2016 – 2017 to 85 %. 85 % t n e m n o r i v n E C S R R E P O R T 8
T he first round of man datory antitrust training started in Q1/17, followed by a second round in Q2/17. Moreover, all new employees undergo compulsory anti- corruption training and onboarding training that in cludes Compliance and Sivantos Governance Basics. Sivantos assess the risk of corruption when doing business. All our business partners have to agree to our code of conduct which specifically mentions anti corruption and ethical behaviour. We are perform- ing the Code of conduct audit (CofC), in addition to the quality audit for all pre-planned supplier quality audit. So far, we have not come across any suppliers that needed escalation to the head of procurement. n o i t p u r r o C - i t n A „All our business partners must agree to our code of conduct …“ Observing the law and the legal system in every country where we do business is fundamental. Coworkers in the Quality department. C S R R E P O R T 9
To begin, we focused on 3 SDGs I n 2015, the United Nations adopted 17 Sustainable Development Goals (SDGs) set to be implemented by 2030. The SDGs characterize the sustainability debate at national and international levels. As a global goals system, it provides a common language and a compass for the chal- lenges of the 21st century — we will gladly follow wher- ever possible. From employ ees raising funds for multiple sclerosis to a multi-year uni- versity sponsorship program in Singapore, it is a broad- scope engagement that has been driven by the passion of our group and staff. As a recent signatory to the UN Global Compact, we are currently embarking on a review process of our ex- isting policies and activities to focus on the first three Sustainable Development Goals. Sivantos supports the Akshaya Patra founda- tion that provides free lunch to schoolchildren all over India. Two of our coworkers in the India office. SDGs we already contribute to: SDG 03: Good Health and Well-Being SDG 04: Quality Education SDG 12: Responsible Consumption and Production C S R R E P O R T 10
External audits for a certified EH&S system for our locations in Singapore and Suzhou, China resulted in an outstanding zero on non-conformities. We love to share our passion for hearing, for example by training others how to fit hearing aids. C S R R E P O R T 11 From developing innovations to shipping finished hearing aids (Pictured: in the US) the customer always needs to be kept in mind.
SDG 3: Health and Well-Being H ere you will find some examples of our acti- vities since signing the UN Global Compact, teers contributed to the over 500 visitors and gained attraction from Brazilian news outlets. contributing to Good health and Well-Being. Australia 25° 16‘ 26.479“ S 133° 46‘ 31.411“ E Each year Multiple Sclerosis (MS) Queensland holds a 100 km cycling event called “Brissie to the Bay!” Sivantos Australia entered a team of 10 to take part in the ride to raise money and awareness for MS. Sivantos supported their team by providing eye-catching and customized cycling jerseys representing our premium brand, Signia. Brazil 14° 14‘ 6.014“ S 51° 55‘ 31.008“ W To raise awareness for hearing loss prevention, the renowned University of Medical Sciences of São Paulo organizes an annual three-hour “Silence Walk” on September 27th. Sivantos volun- C S R R E P O R T 12 Employees gathered with friends and family for the walk. The picture shows a part of our Sivantos team in 2017. Canada 56° 7‘ 49.318“ N 106° 20‘ 48.376“ W In April, Sivantos Canada intro- duced TeleCare; to celebrate this industry-changing invention, Sivantos decided to donate CAD 150 (approx. USD 120) per business account that signed up by the end of February 2018. A great sum of CAD 17,000 (approx. USD 13,600) was collected at the end of the initiative and donat ed to the Gord Downie Fund for Brain Cancer Research. Jeff Malpass, CEO of Sivantos Canada, hands over the check to support the center’s crucial research.
China 35° 51‘ 41.976“ N 104° 11‘ 43.429“ E In cooperation with the China Foundation for Disabled Persons (CFDP), Sivantos China has dona- ted 15 million RMB (approx. USD 3.4M) in funds and hearing aids as part of a charitable acti- vation called “Signia Colorful Sound” benefiting Western China. The cash donation will be used toward education and rehabilitation, and will benefit more than 300 impoverished children living with hearing loss. The donated hearing aids will be provided to adults in the re- gion. Sivantos has been coop- erating with the CFDP since 1997. In China, Signia Colorful Sound gives the gift of hearing to those in need. Italy 41° 52‘ 18.984“ N 12° 34‘ 2.568“ E Sivantos joined the national as sociation “Nonno Ascoltami” (“Grandpa, hear me”) sponsor- ing the campaign “Ascolta responsabilmente” (Hear Respon- sibly), aimed at raising awareness for hearing loss and prevention of it. A 15-meter truck equipped with multimedia tools provided visitors with information on hear- ing care and hearing loss solutions. More than 1,000 people visited the truck in 6 Italian cities and experienced hearing loss simulations and more. Japan 36° 12‘ 17.366“ N 138° 15‘ 10.526“ E In March, the first International Deaf Futsal Challenge Cup took place in Japan to raise aware- ness for deaf sports. Sponsored by the Japanese Deaf Soccer Association and Sivantos, five participants equipped with Signia hearing aids took part in the tournament. The team showed incredible spirit and Sivantos is proud to support such an inspiring success story. Five participants were equipped with Signia hearing aids. C S R R E P O R T 13
Poland 51° 55‘ 9.977“ N 19° 8‘ 42.49“ E Sivantos Poland established a national program called OPOS that focuses on how to protect one’s sense of hearing. They also distribute the hearing care professional magazine “360°wokół ucha” (360° around the ear). The goal is to spread awareness on the importance that hearing plays in our daily lives and to warn against harm- ful noise and situations. Since we couldn’t document this 2017 activity, see here one from 2016: this 10,000 PLN check (approx. USD 3,000) was handed to deaf children from the Education and Training Centre in Poznan. Singapore 1° 21‘ 7.499“ N 103° 49‘ 11.41“ E Close to 300 employees and family members walked 3 km for charity. This annual Walkathon is held in partnership with the local Children Charities Associa- tion. For many years Sivantos employees have taken part of the event. In 2017, Sivantos even became the main sponsor of the walkathon. As the main sponsor, C S R R E P O R T 14 Sivantos donated more than SGD 25,000 (USD 19,100 ) to make the Walkathon 2017 possible. The donation paid off and CCA Singapore managed to raise nearly double the amount we invested – SGD 42,104.40 (USD 32,200) to be exact. With this funding, the CCA will be able to continue to support its more than 65,000 beneficiaries. Some Sivantos employees and their family members at the Walkathon in Singapore, 2017. South Africa 30° 33‘ 34.135“ S 22° 56‘ 15.022“ E As part of a World Hearing Day 2017 initiative, the South African Association of Audio- logists (SAAA) wanted to break the world record for the most hearing tests done in a single eight-hour day. And they did! Altogether, 885 people had their hearing tested. Sivantos supported the event with sup- plies and publicity campaigns.
USA 37° 5‘ 24.864“ N 95° 42‘ 46.408“ W In September 2017, hurricanes Irma and Maria devastated many areas in the US and Caribbean. During the US Signia National Sales Meeting, over 100 em- ployees participated in the No Child Hungry program. Alto- gether, they prepared ap prox- imately 35,000 meals. The organization My Neighbor’s Children assured that the meals arrived in Puerto Rico timely and were distributed among those in need. Employees on their own It is equally impressive to see how our employees independent- ly engage in their communi ties. Here, a couple of examples: USA 51° 55‘ 9.977“ N 19° 8‘ 42.49“ E India has an estimated 18 mil- lion street children who have no access to basic necessities such as shelter, food, healthcare, or education. Subbarao Bop- pana, based in the USA, took a small step in helping these chil- dren by initiating “Miles for Smiles 2017”. With the support from colleagues and friends, he raised USD 3,475 over two-weeks. Miles for Smiles 2017 ended with finishing the New York City Half Marathon on March 19th 2017. Finishing the New York City Half Marathon and thus helping street children in India: Subbarao Boppana. UK 51° 55‘ 9.977“ N 19° 8‘ 42.49“ E Sivantos UK continues fundrais- ing efforts by matching up to £250 (approx. USD355) of any funds raised by colleagues. Over the last 2 years, £ 5,219 (approx. USD 7,400) has been donated to various local and national institutions. Most recently, Andy Rose completed the Brighton Half-Marathon and managed to raise £718.10 (approx. USD1,020) for The Alzheimer’s Society. Another half marathon runner, supporting the Alzheimer‘s society: Andy Rose. C S R R E P O R T 15
SDG 4: Quality Education T o promote excellence and global exposure in audiology care and services in different communities, Sivantos employ- ees volunteer their skills and expertise to local audiologists and students in many countries around the world. Germany 51° 9‘ 56.488“ N 10° 27‘ 5.494“ E C S R R E P O R T In 2011, the German government introduced the Deutschland- stipendium (Germany Scholar- ship) to recognize outstanding achievements by committed students and to provide them the best possible training. Sivantos has been a sponsor of the program since 2012. Sivantos supported students of different universities to attend the Erlanger Collo- quium, a meeting of leading scientists and developers. India 51° 55‘ 9.977“ N 19° 8‘ 42.49“ E Millions of children in India are eager to attend school but are 16 unable to do so due to poverty and hunger. In 2017 and 2018 Sivantos supported the Akshaya Patra Foundation with 1.10 mil- lion INR (approx. USD 17,200) each. The secret of its success lies in the foundation’s efficient organization, its use of local markets, and scalable production. 33 kitchens typically manage to cook 100,000 meals per day. Akshaya Patra aims to feed 5 million children by 2020. Japan 36° 12‘ 17.366“ N 138° 15‘ 10.526“ E In February 2018, Sivantos Japan held the 2nd Yamato City Seminar. As a leading hearing company, we know how im portant it is to contribute to local government campaigns aimed at raising awareness for lesser discussed diseases, such as those associated with hearing loss. Six of our em- ployees vol unteered for a full day to make this event possible. They talked to their visitors about important news ways to treat hearing difficulties.
Singapore 1° 21‘ 7.499“ N 103° 49‘ 11.41“ E An enthusiastic group of Sivantos volunteers organized the “Hearing Awareness Week” at the end of October 2017. More than 500 visitors gained important insights into the causes of hearing loss – and its solutions. Visitors could test their hearing, attend talks by audiologists, experience sim- ulated hearing loss, and have their ear canals inspected. USA 37° 5‘ 24.864“ N 95° 42‘ 46.408“ W Supporting the new generation of hearing care professionals is important to all of us – this is why Rexton recently introduced a USD 60,000 scholarship pro- gram for Audiology students in the USA. Over a three-year period, four students will be selected each year to receive the USD 5,000 scholarship, each. Sivantos Japan collaborates with the city of Yamato: A glimpse into the open seminar. Singapore 1° 21‘ 7.499“ N 103° 49‘ 11.41“ E To promote innovation and research excellence in audiology, Sivantos donated SGD 19.5 mil- lion (approx. USD 14.9M) toward establishing a postgraduate Audiology Program at Singa- pore’s National University (NUS). The donation also covers the first SMART classroom for Audiology in Southeast Asia. The new degree aims to increase the talent pool of locally edu- cated audiologists to meet the growing need for the Audiology profession. Sivantos also offers scholarships and monthly sti pends for selected students. Former Sivantos Group CEO (2016) Roger Radke hands over the check to the National University of Singapore, in 2012. Supporting future hearing care professionals is a goal at Rexton as well. C S R R E P O R T 17
SDG 12: Consumption and Production E fforts and policies to reduce our global consumption are included in our code of conduct and are constantly under review. This applies not only to environmental deci- sions for new buildings or those in pro- duction, but also holds for the recycling of our products and alignment with new policies, such as the European Union’s WEEE Directive. C S R R E P O R T Of course, we consider more facets of sustainability; an example: Sivantos Group has a long tradition of developing energy efficient hearing aids. Very often, boasting the industry’s lowest battery consumption rate is yet another reason why Sivantos- manufactured hearing aids are the smart choice. Users save time and money when changing fewer batteries, while also reducing their environmental footprint. Never heard about EH&S? Not to worry! In simple terms, “Environment, Health and Safety” is what organizations do to make sure that no one is harmed by their activities. Since this is important to all of us, we certainly have global norms and regulations in place as well as sub ject ourselves to audits by independent com- panies to validate the execution of said norms and regulations. That is why every company is more than happy to pass these audits successfully. And yes, you guessed right: The Sivantos Quality Management System (QMS) team has just passed the external audits for a certified EH&S system for our locations in Singapore and Suzhou, China. The audit resulted in an outstand- ing zero on non- conformities, the best result one can get. We are very proud of this outcome be cause we had to set up a new and lean quality management system that is compliant with the relevant ISO norms and regulatory re quirements – all within only eight months! Not to forget that at the same time, we developed our own new EH&S policy, conducted all the train ing, and implemented the new pro- cesses and documents. Next stop on our EH&S journey: audit our Polish location in Poznan. We live up to our commitment to operate in a respon- sible way as these coworkers in Singapore do. 18
C S R R E P O R T 19 Each of our locations strives to reduce our global consumption. Here: manufacturing in Singapore.
Where do we stand today ? The table below lists key performance indicators for activities relevant to Sivantos CSR over the past year. Additional details can be found throughout this report. KPI Indicator 2016 2017 2018 (planned) Workplace OHSAS 18001 certification for our main manufacturing sites (China, Poland, Singapore) Health and safety management standard Employee Satisfaction Rating the following statement: “I rarely think about leaving this company to work somewhere else.”* 2 (China, Singapore) 2 (China, Singapore) 3 (China, Poland, Singapore) 0.61 0.51 Improve employee satisfaction Health and safety Number of work accidents 6 11 Reduce recordable accidents Gender diversity Gender diversity at senior level Gender diversity 59 % 56 % Women as percentage of total global employees Women in VP positions or above as percentage of total 17 % 14 % VP and above employees Societal Impact Continuous improvement Continuous improvement Donations Corporate-wide cash contributions, excluding the annual donations to the NUS, s. further down Social investment Corporate-wide in-kind contributions 209,000 USD Australia, Canada, China, India, Italy,** Poland, Singapore UK, USA Continue 330+ Hearing Aids Brazil, China, Japan Poland, South Africa Continue C S R R E P O R T 20
KPI Indicator 2016 2017 2018 (planned) Societal Impact Employee volunteerism Number of hours volunteered by employees Sivantos donations to the National University of Singapore Sivantos set up a MSc Audiology Social and economic investment Number of countries where Sivantos currently invests or manages programs Partnerships Significant collaborations with corporate partners and NGOs Support for children Children who recei- ved a free lunch as a result of the cooperation between Sivantos and the Akshaya Patra foundation Awareness for hearing loss Visitors at awareness campaigns (minimum range) 1000+ h Brazil, Germany, Japan, Singapore, US (significant amount of hours in response to hurricane crisis) Continue 1,800,000 SGD donated to the 1,800,000 SGD donated to the Continue NUS NUS 12 Brazil, Canada, China, Germany, ** India, Italy, Japan, Poland, Support will be continued Singapore, South Africa, UK, USA 26 in Australia, Brazil (2) Canada, China Germany, India Japan (3), Poland (5) Singapore (4) South Africa, UK (4), USA (2) Support will be continued 1158 *** Support will be continued 52,000+ Brazil, Germany, ** Italy,** Japan, Poland, Singapore South Africa, US ** Continue Number of global manufacturing sites (Singapore, Suzhou, Poland) with ISO 14001 EMS certification Employee base covered with ISO 14001 EMS certification Environmental Standards 2 (China, Singapore) 2 (China, Singapore) 3 (China, Poland, Singapore) 1,848 1,861 Add our Polish employees C S R R E P O R T 21
KPI Indicator 2016 2017 2018 (planned) Environmental Standards Total gross Greenhouse Gas (GHG) emissions (absolute) Scale 1 and scale 2 combined 9,587 tn (FY15/16) 9,473 tn (FY16/17) Total gross GHG emissions (scale 1) Manufacturing sites in China and Singapore only 4,849 tn (FY15/16) 4,816 tn (FY16/17) Reduce GHG emission by 1.7% and add Poland to the count Reduce GHG emission by 1.7% and add Poland to the count Total gross GHG emissions (scale 2) global business flights 4,738 tn (FY15/16) 4,657 tn (FY16/17) Reduce GHG emission by 1.7% Energy and Electricity Usage Electricity usage (GWh) 9,810 (FY15/16) 9,721 (FY16/17) Total water consumption (m3) Considering water usage at major manufacturing locations Sivantos China and Singapore. Water Consumption 16,178 tn (FY15/16) 13,725 tn (FY16/17) Product safety Reduce electricity usage at manu- facturing site in China, Singapore and Poland. Reduce consump- tion in China, Singapore and Poland. Safety related product recalls Per year / and since 2015 0 0 0 * Sivantos asked survey takers to rate the following statement: “I rarely think about leaving this com- pany to work somewhere else.” Scale was 1 – 5 where 1 strongly disagree 2 disagree 3 neither agree or disagree 4 agree 5 strongly agree NPS Results : Detractors : 0.24 based on 5 comparable questions in the pulse survey for 2017 Passive : 0.24 based on 5 comparable questions in the pulse survey for 2017 Promoters : 0.51 based on 5 comparable questions in the pulse survey for 2017 Calculation is number of „Promoters or detractors“ / total employees who have answered * 100 1 – 2 defined as Detractors, 3 defined as Passives and 4 – 5 defined as Promoters. ** 2018 *** As of March 30, 2018 C S R R E P O R T 22
Imprint Official address: Sivantos Pte. Ltd. 18 Tai Seng Street, #08-08 Singapore 539775 Sivantos Pte. Ltd. is a Trademark Licensee of Siemens AG. Some quick facts SGD 19.5 million donation for an Audiology Master Program in Singapore 20 years as a partner with China Foundation for disabled persons 2017 signatory to the UN Global Compact Editorial: Sabine Hauck, Thomas Hies, Gert van Santen Design: Backend Medienservices Lithography: Backend Medienservices The information in this document contains general descriptions of technical options available, which do not always have to be present in indi- vidual cases and are subject to change without prior notice. May 2018 „Thank you for your precious time“ Please visit: www.sivantos.com