The scoring methodology and criteria of the materiality assessment include impact materiality based on scale, scope, irremediability of negative impacts, and likelihood of impacts. For actual positive and negative impacts, materiality is based on the impact severity, whereas for potential impacts, materiality is based on severity and likelihood. Financial materiality considers size of financial effect, likelihood, and impact on reputation. The materiality of IROs was ranked using predominantly qualitative scales, with quantitative input such as scales on financial effect and information from internal sources assessed to be reliable. All impacts, risks, and opportunities ranked over the materiality threshold of 1.8 are included in the report.

The process involves the development of a DMA tool for description and scoring of IROs, including setting thresholds for impact and financial materiality. More than 50 IROs were identified, with documentation including specifications of their nature and where in the value chain an IRO occurs. Further analysis considers geographies with elevated potential impacts or risks, and assessment of impact and financial materiality through scoring workshops with relevant stakeholders. A shortlist of material IROs was further qualified with relevant internal stakeholders.

The methodology includes the development of a DMA tool for description and scoring of IROs, including setting thresholds for impact and financial materiality. More than 50 IROs were identified, with documentation specifying their nature and where in the value chain an IRO occurs. Further analysis considers geographies with elevated potential impacts or risks, and assessment of impact and financial materiality through scoring workshops with relevant stakeholders. The process considers whether an IRO is the result of own operations or business relationships.

The scoring methodology and criteria of the materiality assessment include impact materiality based on scale, scope, irremediability of negative impacts, and likelihood of impacts. For actual positive and negative impacts, materiality is based on the impact severity, whereas for potential impacts, materiality is based on severity and likelihood. Financial materiality considers size of financial effect, likelihood, and impact on reputation. The materiality of IROs was ranked using predominantly qualitative scales, with quantitative input such as scales on financial effect and information from internal sources assessed to be reliable. All impacts, risks, and opportunities ranked over the materiality threshold of 1.8 are included in the report.

In 2024, the double materiality assessment was reviewed and further qualified through deeper impact and risk analyses, such as a human rights impact assessment and a detailed transition risk analysis. The Sustainability Board is accountable for the assessment and management of material sustainability impacts, risks, and opportunities, ensuring sustainability-related risks are considered appropriately alongside other types of risks and are integrated into the continuous risk management processes of the Group's business areas and functions.

The decision-making process involves desktop analysis and interviews with stakeholders, identification of more than 50 IROs, and documentation specifying their nature and where in the value chain an IRO occurs. Further analysis considers geographies with elevated potential impacts or risks, and assessment of impact and financial materiality through scoring workshops with relevant stakeholders. Consultation of stakeholders involves presenting process and material IROs to industry peers, the Executive Leadership Team, the Audit committee, and the Board of Directors for approval of material IROs.

The Sustainability Board is accountable for the assessment and management of material sustainability impacts, risks, and opportunities. This ensures that sustainability-related risks are considered appropriately alongside other types of risks and are integrated into the continuous risk management processes of the Group's business areas and functions.

The Sustainability Board is accountable for the assessment and management of material sustainability impacts, risks, and opportunities. This ensures that sustainability-related risks are considered appropriately alongside other types of risks and are integrated into the continuous risk management processes of the Group's business areas and functions.

The process involves consideration of company strategy and corporate governance model, desktop review of ESG rating methodologies and sustainability reporting standards, review of peers' reporting performance and sustainability strategies, definition of scope to include all entities where Demant has operational control as well as key locations in the value chain, and review and detailed mapping of value chain.

In 2024, the double materiality assessment was reviewed and further qualified through deeper impact and risk analyses, such as a human rights impact assessment and a detailed transition risk analysis. Based on new materiality guidance from the European Financial Reporting Advisory Group, EFRAG, that set the ESRS, and feedback from external auditors, the list, descriptions, scoring, and grouping of IROs were reviewed. This review did not result in any change in the list of material sustainability IROs. In 2025, the DMA process will be updated, considering new learnings and experiences, including further maturing of underlying impact analyses and information from Demant’s due diligence practices.