SUSTAINABILITY

Materiality assessment

In 2023, AddLife conducted a new materiality assessment based on the double materiality approach, in compliance with the new requirements of the Corporate Sustainability Reporting Directive (CSRD) and the European Sustainability Reporting Standard (ESRS).

Results of the materiality assessment
The following ESRS standards are considered material from a double materiality perspective. For a more detailed discussion of the justification for considering a standard as material, see the relevant sections for environmental, social and governance information.

Significant standards in ESRS to report under

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Results of stakeholder dialogue
In 2023, AddLife engaged in dialogue on the topic of sustainability with our key stakeholders. We interviewed our investors, equity analysts, bankers and experts, and we also conducted an employee survey aimed at all employees. In 2024, our dialogues with our key stakeholders will continue, with a focus on our customers and suppliers. The most critical concerns for our key stakeholders include, in no particular order: reducing our climate footprint, improving resource efficiency, ensuring employee well-being and skills development, product safety, making a positive contribution to healthcare and social services, addressing sustainability risks in the supply chain, and adhering to ethical business practices.

Methodology for the materiality analysis and stakeholder dialogues
The materiality analysis was conducted by analysing the operations and value chain based on the topics, sub-topics, and sub-sub-topics as specified in the ESRS. The materiality assessment considers the negative and positive sustainability impacts of different activities in different geographic locations and different segments of the value chain. The materiality assessment also considers whether AddLife is involved in impacts either through our own operations or as a consequence of business relationships. We have engaged in dialogue with key stakeholders and external experts to inform and validate the materiality assessment. Where direct dialogue with relevant stakeholders has not been feasible, we have assessed their viewpoints based on available resources.

Impacts, risks and opportunities have been prioritised based on their materiality. Materiality has been calculated based on various parameters, depending on whether positive impacts, negative impacts, risks or opportunities have been assessed. The threshold has been continually monitored and adjusted during the assessment process in relation to the completed materiality assessments. This approach ensures that no material impact, risk or opportunity is deemed non-material and therefore omitted from the sustainability report.

Materiality for negative impacts is based on their severity and likelihood. Severity is based on the scale, scope and irremediable character of negative impacts. Materiality for positive impacts is based on scale, scope and likelihood. For sustainability-related risks and opportunities, the materiality analysis is based on the potential financial effect on the Group, along with the likelihood of the risk or opportunity. Risks and opportunities have been identified based on the impact AddLife generates and the relationships and resources on which AddLife relies.

In 2023, sustainability-related risks have been assessed separately from other business-related risks within the Group. From 2024 onwards, this information will be integrated into the overarching risk analysis.

AddLife has updated the methodology for its materiality assessment in compliance with ESRS and CSRD. Previously, the materiality assessment only included sustainability-related risks and opportunities for AddLife's operations. Now the perspective of AddLife's impact on people and the environment is also included.