The interests and views of key stakeholders are shared with the Executive Leadership Team through our functional boards as well as our functional and business area leadership teams.

The material impacts, risks, and opportunities identified during the materiality assessment process are organized into 13 material topics. These topics inform both strategy and reporting. The identified material topics determine the European Sustainability Reporting Standards (ESRS) on which the report is based. The material topics include climate change adaptation, talent attraction and retention, product quality and safety, corruption and bribery, and advocacy for hearing health, among others. These impacts, risks, and opportunities are concentrated across the business model, own operations, and upstream and downstream value chain.

Climate change mitigation has a negative impact on the environment, with most emissions being scope 3 from suppliers' operations. Climate change adaptation poses a risk of exposure to natural disasters. Product circularity presents an opportunity to increase recycled components, with a risk of raw material availability. Working conditions may negatively impact employees' mental health, posing a risk to efficiency and reputation. Diversity, equity, and inclusion could have negative impacts if not managed well. Talent attraction and retention pose a risk of high turnover and recruitment costs. Responsible supply chain management involves engaging with suppliers in countries with potential negative impacts on workers' rights. These elements are concentrated across upstream, own operations, and downstream value chain.

In 2023, a comprehensive double materiality assessment process was executed. More than 50 impacts, risks, and opportunities (IROs) were identified, with documentation specifying their nature and value chain location. The assessment included analysis of geographies with elevated potential impacts or risks. A shortlist of material IROs was further qualified with stakeholders. The results were integrated into the reporting plan, grouping material IROs for external reporting based on the ESRS. The organization plans to update the DMA process in 2025, considering new learnings and experiences, ensuring sustainability-related risks are integrated into the continuous risk management processes.

Providing life-changing hearing health positively impacts users by enhancing engagement in life and creating a positive ripple effect. Hearing health awareness presents an opportunity to reduce stigma and empower individuals, potentially having a significant positive impact on individuals and public health. Product quality and safety, if not maintained, represent a risk to the company's license to operate. Right to privacy involves potential negative impacts if data is compromised. Corruption and bribery pose risks of fines and reputational damage. Advocacy for hearing health represents an opportunity to increase awareness and treatment, impacting market penetration rates.

The material impacts, risks, and opportunities identified during the materiality assessment process are organized into 13 material topics that inform both strategy and reporting. These topics determine the European Sustainability Reporting Standards (ESRS) on which the report is based. The material topics include climate change adaptation, talent attraction and retention, product quality and safety, corruption and bribery, and advocacy for hearing health, among others. These impacts, risks, and opportunities are integrated into the business model and strategy.

The time horizons for material impacts, risks, and opportunities are categorized into short term, medium term, and long term. Climate change mitigation and adaptation, product circularity, and other material topics have impacts across these time horizons, influencing the strategy and business model.

Demant's greenhouse gas emissions, primarily scope 3, stem from suppliers' operations and materials. Product circularity involves using recycled components to limit negative environmental impacts. Working conditions and diversity, equity, and inclusion are internal activities affecting employees. Responsible supply chain management involves engaging with suppliers in countries with potential negative impacts on workers' rights. These impacts arise from both Demant's activities and its business relationships.

In 2023, a comprehensive double materiality assessment process was executed, identifying more than 50 impacts, risks, and opportunities. The assessment included analysis of geographies with elevated potential impacts or risks, and a shortlist of material IROs was further qualified with stakeholders. The results were integrated into the reporting plan, grouping material IROs for external reporting based on the ESRS. The organization plans to update the DMA process in 2025, considering new learnings and experiences, ensuring sustainability-related risks are integrated into the continuous risk management processes.

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.